
UNIVERSITY 

OF CALIFORNIA 

LOS ANGELES 



SCHOOL OF LAW 
LIBRARY 



CASES 



ON 



PERSONAL PROPERTY 



The following cases have been printed at the request of Levi T. 

Griffin, A. M., Fletcher Professor of Law in the University of Mich- 

y* . . . 

igan, for use in connection with his lectures in that school. They have 

been compiled by Prof. Griffin with the assistance of Walter Denton 

Smith, Instructor in Law. They have been selected largely from 

Adams' Cases on Sales. 



ST. PAUL: 
WEST PUBLISHING CO. 

. 1895- 



T 

^7535 f 
\B3G 



Coi'viiiaHT, ISUj. 

HY 

WEST PUBLISHIMG COMPANY. 






TABLE OF CONTENTS. 



I PART 1. 

PRELIMINAEY CONSIDERATIONS. 
Rights in Stolen Goods. 

Page 
Hoffman T. Carow 3 

Market Overt in the United. States. 
Griffith v. Fowler it 

Confusion of Goods. 
Gates T. Rifle Boom Co 19 

Patents. 

Wood V. Paclipr 22 

Drummonil v. Yt'iiaMe 24 

Pliillips V. Risser 2o 

Copyrights. 
Bartlette v. Crittenden 28 

Trade-Marks. 

Celluloid Manufg Co. v. Cellonite Manuf g 
Co 30 

PART 3. 

SALES. 

Nature and Distinctions. 

Mitchell V. Gile 35 

Mallory T. Willis 38 

Ilarkness v. Russell & Co 40 

Formation of the Contract — Essentials. 

'\\'ood V. Boynton 48 

Sherwood v. Walker 50 

Redpath v. Brown 54 

Polhill T. Walter 56 

/Derry v. Peek 59 

VyIIuduut V. Gardner 69 

V Hull V. Hull 71 

Holroyd v. Marshall 73 

McConnell v. Hughes SO 

Lyon V. Culbertson 81 

Same— Statute of Frauds. 

Lee V. GritEn 85 

Cooke V. Millard 87 

<5oddard v. Binue.y 95 

Humble V. Mitchell 97 

Tisdale v. Harris 98 

Baldwin v. Williams 101 

AUard v. Greasert 103 

Safford v. McDonongh 105 



Page 

Caulkins T. Hellman 106 

Howe V. Hay ward 10"^ 

Butler T. Thomson lOit 

Sanborn v. Fla.cler Ill 

Effect of the Contract in Passing the 
Property — Sale of Specific Chattel. 

Commonwealth v. Fleming 113 

Giblis V. Benjamin 117 

Meldrum v. Snow 119 - 



Same — Sale of Chattel not Specific. 

Gushing V. Breed 121 

Rhode v. Thwaites 123 

First Nat. Bank of Cairo T. Crocker 125 " 



Conditions and Warranties. 

Marvin Safe Co. v. Norton 128 

Dexter V. Norton 131 y^ 

Dorr T. Fisher l;;.".'*' 

Gould y. Bourgeois 13."> i, 

Jloore V. McKinlay 13.s liCAn 

Sinclair v. Hathaway 13; i / 

Fielder v. Starkiu 140 ^x^t 

Performance of Contract. 

Bloxam y. Sanders 141 \ 

Wood V. Manley 143 \ 

Paul V. Reed 145 ,, 

Stedman y. Gooch 147 frW- ij 

Perley v. Batch 149 ^ \ 

Guion V. Doherty 151 ^r/V \ 

Rights of Unpaid Seller against the ! 

Goods — Vendor's Lien. 

Clark V. Draper 1.^4 j 

Cusack V. Robinson 150 J 



Same — Stoppage in Transitu. 

Babcock v. Bonnell 158 

Kingman v. Deuison 161 

Tufts T. Sylvester 163 



PART 3. 

CHATTEL MORTGAGES. 

Beeman v. Lawton 164 

Harding v. Coburn Il'i5 

Fir.st Nat. Bank of Marquette v. Weed... lO'i 

Welch y. Sackett 170 

Forbes v. Parker 1S4 

Dorsey v. Hall 180 

Thrash v. Bennett 188 

Jones y. Richardson 190 

Williams v. Briggs 195 

Landers t. George 198 



GRIF.PEBS.PROP. 



(iii) 



CASES REPORTED. 



Allard Y. Greasert (61 N. Y. 1).. 



Page 

. lo:; 



Babcock v. BonneU (SO N. Y. 2i4) l."S 

Baldwin v. Williams (3 Mete. [Mass.] 

3G5) 101 

Bartlette v. Crittenden (Fed. Cas. Xo. 

1,082. 4 McLean. 300) 2S 

Beeman v. Lawton (37 Me. o4.3) 104 

Bloxam t. Sanders (4 Barn. & C. 041). . . 141 

Butler V. Thomson (92 U. S. 412) 100 



Caulkins v. Hellman (47 N. Y. 440t 

Celluloid Manuf'g Co. v. CcUouite Man- 

uf's Co. (.32 Fed. 94) 

Clark V. Draper (19 N. H. 410) 

Commonwealth v. Fleming (iS Atl. 622, 

130 Pa. St. 13S) 

Cooke V. Millai-d (65 N. Y. 352) 

Cusack V. Robinson (1 Best & S. 200) . . 
Cushing V. Breed (14 Allen, 376) .' 

Derry v. Peek (L. R. 14 App. Cas. 337) . . 

Dexter V. Norton (47 N. Y. (t!) 

Dorr V. Fisher (1 Cush. 271) 

Dorsey v. Hall (7 Neb. 460) 

Drummond v. Tenable (26 Fed. 243)... 



106 



,".0 
1.j4 



113 

87 

1.56 

121 

r.0 
i::i 

133 

1S6 

24 



Fielder v. Starkin (I H. HI. 17t 1!0 

Fii-st Nat. Bank of Cairo v. Cioeker (111 

Mass. 1G3) 125 

First Nat. Bank of Marqni'ttc v. Woi'd 

(.50 N. W. 864, SO Mifh. .••..57) ir,9 

Forbes v. Parker (16 Pick. 462) ISl 



(:;s N. w. 21.- 



Gatea v. Rifle Boom Co. 

70 Mich. 30!)) 

Gibbs V. Benjamin (45 Vt. 124). 

Goddard v. BInney (115 Mass. 4.50) 

Gould V. Bourgeois (18 Atl. 64, 51 N. .1. 

I,;nv, .361) 

Griflith V. Fowler (IS Vt. .300) 

Guiou V. Dohorty (13 .Miss. .5.".8) 

Harding v.Coburn (12 Melc. [Mass.] .333). . 
Harkness v. Russell & Co. (7 Sup. Ct. 

51, lis U. S. 60.3) 

IIofTman v. Carow (22 Wend. 2.S5) 

Uolroyd v. Marshall (10 H. L. Cas. 101) 
Howe T. Hay ward (IDS Moss. 54) 

ORiF.PBns.pnop. 



Page 
Hudnut ▼. Gardner (26 N. W. 502, 59 

Mich. 341) 69 

Hull V. Hull (48 Conn. 250) 71 

Humble v. Mitchell (11 Adol. & E. 205). . 97 

.Tones v. Richardson (10 Mete. [Mass.] 
4S1) 100 

Kingman v. Denisou (4S N. W. 26, Si 
Mich. 008) 161 



Landers v. George (49 Ind. 309). 
Lee V. Griffin (1 Best & S. 272). . 
Lyon V. Culbertson (S3 111. 33) . . . 



MeCoimell v. Hughes (29 Wis. 537) 

Jlallory v. Willis (4 N. Y. 70) 

JIarviu Safe Co. v. Norton (7 Atl. 41S, 4S 

N. J. I^aw, 410) 

Meldnim v. Snow (0 Pick. 441) 

Mitchell V. Gile (12 N. H. 300) 

Moore v. MeKinlay (5 Cal. 471) 

Paul V. Reed (52 N. H. 130) 

Perlcy v. Balch (23 Pick. 28.3) 

Philliiis V. Rissor (26 Fed. 308) 

Polhill V. Waller (3 Barn. & .\dol. 122). 



19S 

&5 
Si 

SO 
3S 

12S 

110 

35 

13S 

145 

149 

25 

50 



Redpath v. Brown (39 N. W. 51, 71 Mieh. 

•■^->>') 

Rhode V. Thwaitcs (0 Barn. & C. 388).. 



Sarf<»rd V. McDonoiigh (120 Mass. 290).. 

Sanborn v. Flagler (0 Allen, 474) 

Sherwood v. \\alker (33 N. W. 919, 00 

10 Mich. 5C>S) 

117 Siucl.'iir T. Hathaway (23 N. W. 4.59, 57 

05 Mich. 00) 

Stedmau v. Gooch (1 Esp. 4) 

i:!5 ! 

1 7 : 'I'hnish V. Benyelt (57 Ala. 156) 

1.51 ' Tisd-ile V. Harris (20 Pick. 9) 

'I'ufls V. Sylvester (9 AU. 357, 79 Me. 213) 
16,5 



40 

3 

73 

lOS 



Wehh V. Sackctt (12 Wis. 213) 

AVIUiams v. Briggs (11 R. I. 176) 

Wood V. Boyutou (25 N. W. 42, 04 Wis. 

265) 

Wood V. Mauley (11 Adol. & E. 34) 

Wood V. Packer (17 Fed. a50) 

()v) f 



54 
12;5 

105 
111 

50 

139 

117 

1.8,S 

08 

103 

176 
105 

48 

113 

22 



CASES 



ON 



PERSONAL PROPERTY 



OHIF.PKRa PBOP. (1)* 



PRELIMINARY CONSIDERATIONS. 



HOFFJIAN et al. v. CAROW. 

(22 Woud. 285.) 

Court of EiTors of New York. Dec, 1839. 

Error from the supreme court. Carow 
brought an action of trover in the superior 
court of the city of New Yorli, against Hoff- 
man & Co., auctioneers in the city of Balti- 
more, in the state of Marj'Iand, for a quan- 
tity of merchandise stolen from the plaintiff 
in the city of New York, and forwarded by 
the thief to the defendants to be sold at 
auction. The thief was indicted and con- 
victed of the felony in May, 18.33, previous to 
which time the goods had been sold and the 
I)roceeds paid over by the defendants to the 
thief, without notice of the felony. The suit 
was commenced in October, 1834, against the 
defendants, who moved for a nonsuit on the 
grounds, that the proceeds of the goods hav- 
ing been paid over to the thief previous to 
his arrest, and before the defendants had no- 
tice of the robbei-y, the plaintiff was not en- 
titled to recover; and that at all events im- 
der the circumstances of the case, the plain- 
tiff was bound to prove a demand and re- 
fusal. The .iudge presiding at the trial re- 
fused a nonsuit, and charged the jury to find 
for the plaintiff. The defendauts excepted. 
The jury found a verdict for the plaintiff, up- 
on which judgment having been entered the 
defendants removed the record into the su- 
preme court, where the judgment of the 
court below was atSnued. See the opinion 
delivered by the chief justice (20 Wend. 22). 
A writ of error was thereupon sued out re- 
moving the record into this court. 

H. R. Winthrop and D. B. Ogden, for plain- 
tiffs in error. I. Anthon, for defendant in er- 
ror. 

After advisement, the following opinions 
were deUvered: 

WALWORTH, Ch. The simple question 
presented for our decision in this case is, 
whether the purchaser of stolen goods, who 
afterwards sells them as his own to a bona 
fide purchaser, is liable to the owner of the 
goods, in an action of trover for such con- 
version thereof to his own use? One of the 
members of this court, upon the argument, 
supposed the bare statement of such a case 
was sufficient to enable the court to decide it 
without further argument; and I thought so 
too, until one of the learned and very able 
counsel for the plaintiff's in error assured us 
he was sincere in believing the action could not 
be sustained, and refeiTed to a case from the 
English Term Reports which was apparently 
a decision in favor of his clients. To under- 
stand that case, therefore, and to distinguish 
it from the present, I have found it necessary 
to bestow a little more time upon the exam- 
ination of this subject than I should have 
otherwise deemed it my duty to give to it. 

It is known to tlie professional members of 
the court, that in the market towns in Eng- 



land there are periodical fairs, where prop- 
erty is iKJught and sold, called market days; 
and that by the custom of the city of Lon- 
don, every day except Suuday is a market 
day, and every tradesman's shop is a market 
overt for those things in which he usually 
deals at that place; and that by the common 
law, a sale in a market overt actually chan- 
ges the title to the property in favor of a 
bona hde purchaser thereof, even though it 
has been stolen from the rightful owner. 5 
Coke, S3a. The only remedy of the owner 
of stolen property to recover it again, under 
such circumstances, at the common law, was 
to pursue his appeal against the felon to con- 
viction, and then he was entitled to restitution 
of his goods, although they had been sold in a 
market overt. 2 Co. Inst. 714. So, also, if 
goods were stolen, and the thief abandoned 
or waived them in his flight, they were for- 
feited to the crown, or the lord of the manor, 
unless the owner proceeded upon his appeal 
to attaint the thief. Foxley's Case, 5 Coke, 
109a. But as this proceeding to convict the 
felon by a private suit was very inconven- 
ient and expensive to the owner of stolen 
property, the statute 21 Hen. VHI. c. 11, was 
enacted, by which the stolen goods were di- 
rected to be restored to the owner upon his 
procuring a conviction of the thief, upon an 
indictment in the ordinary way, without the 
necessity of an appeal. Staunf. P. C. (Ed. 
1583) p. 167. Under this statute, it is the 
settled law in England, that tipon the convic- 
tion of the offender, the owner is entitled to 
be restored to his property, notwithstanding 
it may have been sold to a bona fide pur- 
chaser in a market overt. Burgess v. Coney, 
Trem. P. C. 315; 2 Co. Inst 714; J. Kel. 48. 
In the case of Horwood v. Smith, 2 Term 
R. 7.50, relied on by the counsel for the plain- 
tiffs in error to show that they could not be 
liable for a conversion of these goods which 
took place before the conviction of the thief 
in May, 18.33, there had been an actual sale 
of the stolen property to Smith. th% defend- 
ant, in a market overt. The title of the own- 
er was therefore absolutely divested by this 
sale, so that Smith, the defendant, could not 
be guilty of a conversion as to him, by after- 
wards selling the sheep to another person, 
before the plaintiffs' right to the property 
had been restored by a conviction of the fel- 
on. By a reference to the opinion of Mr. Jus- 
tice Biiller in that case, it will be seen that 
he puts the decision upon that ground; and 
the language put by the reporter into the 
mouth of Lord Kenyon, that the title to the 
stolen property was in dubio previous to the 
sale to the defendant in the market overt, I 
shall presently show is not considered as 
law, even in England. The case under con- 
sideration, therefore, differs from Horwood 
V. Smith in this: that there had been a sale 
in market overt in that case previous to the 
alleged conversion, and the title which Smith 
acquired by that sale was not divested by the 
subsequent conviction until long afterwards. 



PRELIMIXAUT CONSIDERATIONS. 



which conviction was considered as giving 
the original owner a new title to the proper- 
ty; whereas, in tlie present case, tliere never 
had been any sale iu a marL;et overt, to con- 
vey any title to the defendants which re- 
quired to be divested by a conviction. Wheth- 
er there are any markets overt in Maryland, 
where the defendants purchased this prop- 
erty from the thief, I do not know; but if 
there are, there was no attempt to prove on 
the trial that they purchased the property 
in a market overt; and the learned Judge 
Blaekstone, "the English Justinian," says, in 
so many words, that "if my goods are stolen 
from me and sold out of market overt, my 
property is not altered and I may take them 
wherever I find them." 2 Bl. Comm. 449. 
See, also, Foxley's Ca.^e, 5 Coke, 109a; and 
Kelh, Laws of William the Conqueror, 73, 
law 44. 

The case of Parker v. Patrick. 5 Term R. 
175, depends upon an entirely different prin- 
ciple. The goods in that case were obtained 
by fraud and not by felony. The sale to the 
fraudulent vendee was. therefore, not void, 
but only voidable at the election of the ven- 
dor; and as the vendee had pawned them 
to an innoceut person for a valuable consid- 
eration, the pawnee was permitted to hold 
them as against the owner who had enabled 
the vendee to obtain property of the defend- 
ant, upon the securitj- of property which had 
apparently been sold to the pawnor, so as 
to give him the legal title thereto. Moroy v. 
AValsli, in om- supreme court (S Cow. 238), 
was decided in favor of the bona fide pur- 
chaser from a fraudulent vendee, upon the 
same principle; although it will be seen the 
chief justice said in that case, that in this 
slate where we had no niarliets overt, a .sale 
of stolen goods would not divest the title of 
the owner. The same distinction between 
the cases of goods obtained by fraud and 
goods obtained by felony, is noticed by Lord 
Dennian in Peer v. Humphrey, 1 liar. &; W. 
28, wliich is also a direct authority in favor 
of sustaining the judgment of the supremo 
court in tlio i)resent case. Indeed, it is a case 
upon all fours with this, and makes the dis- 
tinction, which 1 liave lieen cndiavorlng to 
explain, between ITorwood v. Smith, and the 
case which we are now to decide. The serv- 
ant of the plaintiff stole three o.xen and a 
heifer from hlin and sold the three oxen to 
the del'cnrlant for cash, but the sale was not 
In a market overt; the thief was afterwards 
taken and convlct('<l, but before that convic- 
tion the defendant had sold the cattle to 
other persons. After the conviction of the 
thief the plalntlfl' brought his action of tro- 
ver against \\\i- del'endnnt, for the previous 
conversion, as In this case, and recovered tlic^ 
value of the cattle. Upon the cn.se iK-Ing 
brought before the court ol' king's bench, the 
••ounsel for the defendant cited llorwood v. 
Smith, and referred to what Lord Kenyon 
HtiUi as to the prop<Tty being In dublo be- 
tween the felony and the conviction. To 



which Lord C. J. Deuman replied "that must 
be a mistake, or the consequence of the judg- 
ment having been delivered hastily," and in 
giving his opinion afterwards, he said that 
in the case then imder consideration the 
property in the cattle never was divested out 
of the ti-ue owner; but that a sale in market 
overt gave a prima facie right of property. 
Justice Littledale says, "as the defendant did 
not purchase in market overt, he acquired 
no title whatever iu the cattle; that remain- 
ed in the plaintiff, and therefore the defend- 
ant's subsequent sale of them, amounted to 
an act of conversion." And Justice Williams 
said that Horwood v. Smith merely laid down 
that a party by piu'chasing in market overt 
acquired a property iu the thing stolen; but 
as the purchase in the case they were then 
considering was not such a sale, no property 
passed to the defenilaut in point of law and 
was never divested out of the plaintiff. The 
verdict therefore was directed to stand. It 
appears by this case, and also by that of 
Gainsou v. Wood lull. 2 Car. & P. 41, that the 
courts in England will not sustain a suit in 
favor of the owner of the stolen propeity, 
either against the thief or against a purchas- 
er from him. uutil he has proceeded crim- 
inally against the thief for the felony. This 
practice imdoubledly proceeds upon the an- 
cient common law principle that the civil in- 
jury is merged in tlie felony; but as the Re 
vised Statutes of isoi, which abolished ap 
peals of felony in tliis state, also declavecf 
that the civil remedy should not be merged 
in the felony, or in any manner affected 
thereby, this English rule does not apply to 
suits commenced here. 1 R. L. 1801. p. 204, 
In the present case, however, the plaintiff 
had convicted the tliief before the com- 
mencement of his suit. He was therefore en- 
titled to recover according to the English 
practice. 

I have no doubt that the decision of the 
court below, was correct; and the judgment 
should be affirmed. 

By Senator EDWARDS. In this case it Is 
clcarl.v shown that Carow had the title to 
the property. This title he could not be di- 
vested of, but by his own consent or by the 
ojx'ratlon of law. lie did not consent to part 
with the properly because It was sIoUmi from 
him, and the (inestion Is, has he been di- 
vested of It by tlie operation of law since tln! 
felony. 

The sale of the projjorty at public auction 
could not divest the owner of his rights. N^i 
one can transfer to nnotlier a gn-ater inter, 
est In personal property, than he or the prin 
cipal for whom he .-lets, possesses. This is 
one of the fundaniental principles by whlct 
the right to personal property Is t<>8ted li! 
cases of sale, and Is of great anihiulty. "Ne- 
mo plus Juris In alluni translcrre potest, 
qtiam Ipse li:ibel," w.'is considered a sound 
and salutary principle of the civil law in 
Trance and Scotland, even In the time o/ 



KIGHTS IN STOLEN GOODS. 



PoTliier and Erskine;* and although England 
h;is departed from it in one instance in the 
law of market overt, yet that law has never 
been adoi)ted in this country, and whenever 
the question has been presented to American 
judicial tribunals it has been repudiated. 
Wheelright v. De Peyster, 1 Johns. 480; 
Dame v. Baldwin, 8 Mass. 518; 1 Yeates, 
478; 2 Kent, Comm. 324. As to the question 
therefore under consideration, it is wholly 
immaterial whether the property be sold at 
public auction by an auctioneer or at private 
sale by any other individual; the owner's 
rights cannot be affected in the one case 
more than in the other, nor can the purchas- 
er acquire any greater interest in the one 
case than in the other. Disposing of or as- 
sutning to dispose of another's property with- 
out his consent, unless by the operation of 
law, is a conversion for which this action 
lies. Everett v. Coffin, 6 Wend. 609; 4 Maule 
& S. 259; McCombie v. Davis, 6 East, 538; 
Parker v. Godin, 2 Strange, 813; Wilbraham 
V. Snow, 2 Saimd, 47; 2 Phil. Ev. 121. Nor 
can even a bona fide purchaser protect him- 
self under such a sale. The doctrine of ca- 
veat emptor applies, and he is liable to the 
action of trover by the real owner, notwith- 
standing his purchase. Williams v. Merle, 
11 Wend. 180; Prescot v. De Forest, 16 Johns. 
IGO. Were the rule as contended for by the 
counsel for the plaintiffs in error, all the fel- 
on -would have to do to divest the owner of 
the right to his property, would be to place 
it in the hands of an auctioneer as soon as 
stolen, and cause a sale to be made of it; a 
rule of law that would thus encoiu-age felony 
and deprive the owner of his property, would 
be as absurd as unjust. 

When property is taken without legal au- 
thority or the consent of the owner, it is 
unnecessary for him to make demand before 
action brought. When he has once consent- 
ed to part with the possession, in some cases 
it is necessary to made a demand to show 
a conversion, but when the possession is 
wrongfully taken, there is a conversion and 
no demand is necessary. 

The Revised Statutes have not altered the 
nature of this action in a case like the one 
we are now considering, as the counsel 
would seem to suppose from his argument. 
The statute is intended to make provision 
relative to stolen property, where it has been 
arrested from the felon, and is in the custo- 
dy of some legal officer, but does not extend 
to a case where the felon has delivered the 
property to an auctioneer to make sale of 
it for his benefit. I am therefore for alfirm- 
ing the judgment. 

By Senator FURMAN. No case like the 
present has ever been decided by this court; 
and it is of the utmost consequence that an 
adjudication, having the important bearing 
that this promises to exercise upon the com- 
mercial interests of our country, should not 
be determined until after a patient investi- 



gation of the principle In all its bearings, 
and a due examination of the ad.iudgid 
cases under which the doctrine is sought to 
be established, and of the facts and circum- 
stances under which they were decided. 

The principle rests in the common law, 
that a felon does not acquire an.y title to 
the goods stolen, that he cannot transfer 
title even to a bona flde purchaser, and that 
the owner may take his goods which have 
been so stolen wherever he can find them. 
But it was very early discovered, that the 
commercial interests of the English nation 
required that some exception should be 
made to this general rule, and it was for 
that purpose that the courts in that king- 
dom held that the principle did not apply 
to sales made in market overt; and that 
sales made under such circumstances Bhould 
convey a title to the bona fide purchaser, 
although the property might have been 
stolen. Even this exception was not found 
sufficiently broad to meet the wants of a 
trading community, in which it is absolutely 
necessary, for the well being of society, that 
a bona fide purchaser should be protected in 
his possession of personal property; and the 
exception was still further extended to sales 
made in public shops in the city of London. 
It is well to remark here, that in England 
such markets overt are held, either by pre- 
scription or by charter, and in no instance 
does the charter declare that sales made 
therein shall be conclusive; but the doctrine 
has arisen from the exigencies of trade, and 
has been adopted with a view to protect and 
favor the commercial interests of that coun- 
try. But it is said by our courts, and with 
truth, that the principle of sales in market 
overt, as It exists in England, has no ap- 
plication to this country. Although this is 
admitted, yet I may be allowed to express 
my surprize, that, with our trade and com- 
merce, we should have no similar doctrines 
or principles to protect it, but that, on the 
contrary, we should seek to establish a rule 
which governed England in the infancy of 
its commerce, which was adopted by its 
courts at a period when it had no manufac- 
tures, and its whole trade consisted in rais- 
ing wool and exporting it to Flanders to be 
wrought into cloth, and which was repudi- 
ated by those courts at a period when the 
commercial relations of that country were 
not of one quarter the importance or value 
of those of our own country at the present 
time. My surprize has not been diminished, 
when 1 find that almost every commercial 
nation, ancient as well as modern, beside 
our own, had found it necessary to adopt 
some such doctrine. It was wisely provided 
by the laws of Athens, that all lawsuits re- 
lating to commerce should be carried on in 
the six months during which ships were not 
accustomed to put to sea, to the end that 
they might not lose their voyage by the im- 
pediment of legal prosecutions. On the con- 
trary, we, although depending on foreign 



PKEUMINARY COXSIDERATIOXS. 



commerce for our prosperity to a much 
greater extent than ever the inhabitants of 
that ancient state did, hold a mere com- 
mercial agent liable in damages, at any 
time within sis years, for an act honestly 
done by him in the course of business, and 
that even without a previous demand before 
the suit is instituted. In the Komau state, 
Ulpian speaks of the great privileges grant- 
ed by the government to merchants, and 
gives for it the general reason, because 
navigation is of the greatest service to the 
state. 

In England, the plaintiff could not recover 
merely because the goods had been stolen, 
without that fact having been first judicial- 
ly ascevtained. Before the statute of the 
21 Hen. VIII., the owner was not entitled to 
a restitution of the stolen property, even 
upon the conviction of the felon on indict- 
ment, but could only obtain the same by 
prosecuting an appeal. After the enactment 
of that statute, appeals were disused, and 
were rendered unnecessary, because the 
court might, on the conviction of the felon, 
award restitution; and the courts are now 
in the habit of doing so. Our own statute 
(2 Rev. St. 74", § 33) adopts the English stat- 
ute on that point. In England, the action 
under the award of restitution cannot be 
maintained against any one except him who 
shall be in possession at the time of the 
conviction or attainder; and a demand is 
also requisite before the action is brought. 
G Mod. 412. The reasonable inference from 
this statute, and the manner of proceeding, 
seems to be tliat in t)ie case of stolen prop- 
erty, the title of the plaintiff, so far at least 
as to enable him to maintain trover, is not 
estal)lished before the conviction or attain- 
der; at any rale, he is not before then en- 
titleil to a restitution under the statute. 2 
Car. & P. 41, and note. It does not appear 
from this case, that tlie felon was convicted 
of the felony charged before this suit was 
brought; but it does appear that the pro- 
ceeds of the sale of the goods in question 
wei'c paid over to him before he was even 
iirrostod. Our statute docs not a\ithorizo 
the plaintiff to recover his goods from any 
one who may at any time have had the 
goods In his i)ossession, but merely author- 
izes a recovery in general terms. The stat- 
ute (2 Uev. SI. 747, § 34) seems to recognize 
the principle, that under certain circum- 
stances, al.l.ougli tlie propert.v has been 
stolen, a good title may be conveyed by a 
per.ion not the owner, or at the least, a title 
sufllclcnt to protect a bona tide iiurchaser 
friini uu action of trover, for that section 
provides, that "IP stolen iiniperty shall not 
be cUilincd by the owner tlicrcof before the 
exphallon of six months from the time an.v 
por.HoM Kliiill lijivc been convicted of stealing 
Rilcli priipcrty, the iniiglstrate, slierllT, cdii- 
stnlde, or dIIht rdlh'cr. or person having the 
sniue 111 Ills ciiHlody. sliall ih'llver hiicIi prop- 
erty to the county Htipeilntendents of the 



poor, on being paid thfi reasonable and nec- 
essary expenses incurred in the preservation 
thereof, to be appropriated to the use of the 
poor of such count.v." This enactment is 
made notwithstanding that by the general 
law of the land, the owner is entitled to six 
years within which to bring his action; and 
certainly the legislature cannot be presumed 
to have intended to authorize an illegal dis- 
position of another's property. 

But there is a stronger and more express 
exception to this general principle, which is 
to be found in the case of negotiable bills 
of exchange and promissory notes, where 
possession is prima facie evidence of prop- 
erty, and a bona fide holder can recover up- 
on the same, although a bill or note came to 
him from a person who had stolen or robbed 
it from the owner, provided the bona fide 
holder took it innocently in the course of 
trade for a valuable consideration, and un- 
der circumstances of due caution. Suspi- 
cion must first be cast upon the title of the 
holder, by showing that the paper had got 
into circulation by force or fraud, before 
the burden is thrown upon him of showing 
how he came by it, and what consideration 
he gave for It. This protection is, for the 
sake of trade, given to the holder of nego- 
tiable paper, who receives it fairly in the 
way of business; and why the same prin- 
ciple should not be applied to other personal 
property which p.asses through the hands 
of an individual fairly, in the course of tr.ade 
and without notice, is difficult to imagine. 
If Lord Manslield, with his clear and com- 
prehensive mind, felt himself called upon, 
ex necessitate rei, to depart from the com- 
mon law, and to establish the principle 
above stated in the case of negotiable com- 
mercial paiier, it cannot for a moment be 
doubted, that If the judges who preceded 
him had not deemed it necessary to protect 
the innocent bona fide purchaser, by the doc- 
trine of sales in market overt, that the great 
founder of English commercial law would 
have extended the same principle to all 
other property the subject of mercantile 
transaction. 

It Is the boast of the common law, that It 
accommodates Itself .to tlio growing wants 
of a thriving commercial peojjle; and It has 
not been in bravado merely, that this has 
been put forth; but in tlie hands of the ven- 
erated sages of the lOnglish (bench, It has 
been pnieiically applied. Wluit did the .'igo 
of Jlenry VIII., when the "tireat Abi'lrlge- 
ment of the Statutes of the Realm" fornieil a 
single volume hut little l.-irger than a poeket 
Bible, know of the law of bills of exchange 
and jiroMilssory notes, or of the law of insur- 
ance and shipping? Nothing. All this, and 
n thous.'ind \\M mor(>, has been engrafted 
upon It by Judicial legislation, until It has 
truly become the c(illecte<l wisdom of ages. 
"Ita lex scrlpta est" was not regarded by 
those sages, as It Is too much the case in 
our day, a sutllcicnt answer to an arguini'nt 



RIGHTS IN STOLEN GOODS. 



however cogent, for the establishing a new 
principle arising I'l-oni the wants of the com- 
munity; but with tliein it advanced and ex- 
panded to meet those wants. A tame sub- 
serviency to precedent would have prevented 
all tlie improvements in tliat body of law, 
which have been the means of rendering it 
the admiration of the world; and we have 
great cause for thankfulness, that such was 
not the course pursued in the country from 
which we have derived our institutions as 
well as our law. 

Ou the part of the defendant in error, it is 
contended that the goods in question having 
been stolen, the delivery conferred no au- 
thoritj' ou the iJlaiutiffs in error to sell them; 
that such sale was a conversion; and that 
the payment of the proceeds to the felon, 
although without notice or knowledge of the 
felony, does not discharge the plaintiffs in 
error from responsibility to the right owner, 
who it is insisted has a right to reclaim his 
property, and to hold any one responsible 
Willi has assumed the right to dispose of it; 
and that the fact of the plaintiffs in eiTor 
being auctioneers does not vary their re- 
sponsibility. On the argument of, these 
points a number of authorities were cited; 
in the examination of which a short time 
may not be unprofitably spent in order to 
ascertain what were the facts and reasons 
which led to their decision. Among tMe 
cases on which the counsel for the defend- 
ant in error relies to sustain the recovery 
against the plaintiffs in error, is that of Peer 
V. Humphrey, 2 Adol. & E. 500, in which the 
property was stolen and sold to the defend- 
ant who was a bona fide purchaser. Two 
days after the sale, the plaintiff having dis- 
covered his iiroperty in the defendant's pos- 
session gave him notice that it had been stol- 
en from him, and demanded possession, which 
was refused. Three months after this notice 
and demand, the defendant sold the property 
in market overt and appropriated the pro- 
ceeds to his own use. The thief was con- 
victed of the felony on the prosecution of the 
plaintiff; and afterwards, the plaintiff 
brought an action of trover and recovered 
against the defendant. Here it will be noted 
that the property having been sold by the 
defendant in market overt, the plaintiff could 
not follow it up, and could not recover of any 
other person than the defendant. No one, 
however, would feel much reluctance in sus- 
taining such a judgment, for the defendant 
was possessed of the property at the time of 
the demand, and disposed of it three months 
after he had received notice that it had been 
stolen. So if the auctioneers in this case 
had sold the goods of Carow, after they had 
notice of the felony, and after he had de- 
manded the goods from them, and had then 
paid over the money to the felon, it would be 
a parallel case with that cited. 

The next case is that of Stephens v. El- 
wall, 4 Maule & S. 259. That was trover. 
The plaintiffs were the assignees of a bauk- 



mpt, who being possessed of the goods in 
question, sold them after his bankruptcy to 
one Deane, to be paid by bills on Heath- 
cote, who had a house of trade in London, 
and for whom Deane bought the goods. 
Heathcote was in America, and the defend- 
ant was his clerk, and conducted the busi- 
ness of his house. The goods were delivered 
to the defendant, who sent them to Heath- 
cote in America. A demand was made on 
the defendant before suit brought, but not 
until after the expiration of nearly two years 
from the purchase. The defendant was held 
liable. It is not difficult to see that this 
case rests mainly upon the principles govern- 
ing bankruptcy cases in England. In that 
case. Potter v. Starkle (decided in England 
in 1807) is cited, and is also referred to by 
the counsel for the defendant in error. There 
the court held the sheriff liable in trover 
although he had seized, sold and paid over 
the money before the commission of bank- 
ruptcy issued, and before notice, but after 
the bankrupt had committed the act of bank- 
ruptcy. The courts in England have in all 
these bankrupt cases invariably, held the 
doctrine, that after an act of bankruptcy, the 
bankrupt cannot by sale pass the title to 
any of his goods or property, or in any way 
divert the same from the satisfaction of his 
just debts; and that from that moment, the 
property belongs to his assignees to be ap- 
pointed under the commission. This doctrine 
forms a part of the policy of the commercial 
law of England; and arises from the foster- 
ing and protecting care which the courts of 
that nation exercise over their commercial 
Interests. It is based upon the same prin- 
ciples which have induced the courts to sus- 
tain the exception in favor of sales in mar- 
kets overt, and the peculiar custom as to 
sales in public shops in the city of London. 
The case of Cooper v. Chitty, 1 Burrows, 
20, is another of these bankrupt cases, and 
was trover brought by the assignees of 
Johns, a bankrupt, against the sheriffs of 
London, who had seized and sold goods in 
the possession of the bankrupt under a fi. fa. 
The facts were these: Johns committed the 
act of bankruptcy Dec. 4, 1753. Dee. 8, he 
was declared a bankmpt and the commis- 
sion issued; and on the same day, the as- 
signment was made. Twenty days after, the 
sheriffs sold the goods on a judgment re- 
covered against Johns after the act of bank- 
ruptcy was committed. It is difficult to 
see what question there could be about this 
case; and in the decision of it. Lord Mans- 
field says, it is admitted that the property 
was by relation in the plaintiffs as and from 
the 4th of December (which was before the 
seizure by the sheriff's, and in fact before the 
judgment was recovered), that this relation, 
by the statutes concerning bankrupts, was 
introduced to avoid frauds. And the court 
held the defendants liable, on the ground 
that the conversion was twenty days after 
the assignment, and that the sheriffs ought 



8 



PEELIMIXART CONSIDERATIONS. 



uot to go on to a sale after a full discovery 
that tlie goods belonged to a third person. 
This principle I agree should be held appli- 
cable to the cases of stolen property. A 
party should be held liable if after a full dis- 
covery that the goods belonged to a third 
person he proceeds to a sale; but not other- 
wise. 

As to these bankrupt cases, it was very 
early found necessary in governments which 
authorized personal arrest and Imprisonment 
for debt, to interpose and provide relief to 
the debtor in cases of inevitable misfortune; 
and this has been especially the case in re- 
spect to insolvent merchants, who are obliged 
by the habits, the pursuits, and the enter- 
prising nature of trade, to give and receive 
credit, and to encounter extraordinai-y haz- 
ards. Thus we find the cessio bonorum, or 
cessio miserabilis, was established at Rome, 
by the Julian law; and when a person ap- 
plied for the benefit of that law, the creditors 
had their election either to grant to the in- 
solvent a letter of license for five years, or 
to take a general assignment of all his prop- 
erty, on condition that he should not be im- 
prisoned—a provision creditable to the gen- 
eral intelligence of that early period; and 
one better adapted to the exigencies of a 
commercial nation than the laws now exist- 
ing either in England or this country. Bank- 
rupt and insolvent laws are designed to se- 
cure the application of the effects of the 
debtor to the payment of his debts, and then 
to relieve him from the weight of thom. Un- 
der these laws the title of the l)ankiupt to 
the remnants of his property, becomes ab- 
solutely vested in the assignees. These laws 
are in the nature of a contract between the 
government and the mercantile portion of 
the comnumity, that if, in the event of mis- 
fortune, they will surrender all their prop- 
erty and effects to the satisfaction of llieir 
creditors, the government will discharge 
them from tlie penally consequent upon their 
failure to meet their engagements, and it is 
the duty of the couits to see that it Is rigidly 
complied with on the part of the bankrupt 
debtor. But the principles which the courts 
In England have found it necessary to adopt, 
in order to oblige a bona tide ai)i)Ilcaliun of 
all the effects of the bankrupt to that object, 
cannot reasonably be extended beyond tliat 
das.s of cases, for the jiurpose of deciding 
others which rest upon different principles. 

Having thus gone through with an exnin- 
Inntlon of the English cases cited and relied 
upon by the counsel for the defendant In 
error, to sustain the Judgment below, It Is 
seen that In all of tlieni are to be found 
f.11'18 which Induce us to yield our assent 
to tlii'lr decision. Jn oiich of them we dis- 
cover that notice of the slate of the case 
was brought home to the defendant while 
he renin Ined In (he iinsHcsslon of the prop- 
erty In diNpute; and In all of them we find 
that a doninnd was made before suit 
lir'iueht Among those cases, lliroo of tliein, 



viz. that of 4 Maule & S. 259, that of Potter, 
V. Starkie (also cited in that volume), and 
that of 1 Burrows, 20, are cases decided up- 
on the peculiar principles which govern the 
bankrupt laws of England; and there is but 
one case, that of 2 Add. & E. 500, which is 
similar to that in question, and the facts 
which it appears it was deemed necessary 
to prove in that case to warrant a recovery, 
go far to sustain some of the objections 
taken here by the plaintiffs in error against 
this judgmenj. The result is, that I do not 
find that any of those cases carry the doc- 
trine sought to be enforced by the defend- 
ant in error, to the extent to which it has 
been carried by the decision of the supreme 
court in the present case. It is now neces- 
sary to make a similar examination of the 
cases in our own courts in order to see in 
what light they view this principle deduci- 
ble from the common law. 

The first of our own decisions by the su- 
preme court, cited by the counsel in sup- 
port of the doctrine laid down by the court 
in this case, is that of Everett v. Coffin, 6 
Wend. 603. The facts in that case were, 
that CoUlns, the master of the brig Dove, at 
New Orleans, signed a bill of lading that 
Bridge & Vose had shipped in her for New 
York, 179 pigs of lead, to be delivered to 
Tufts, Eveleth & Burrell, or their assigns, 
on paying freight. A letter was in evi- 
dence, showing that it was shipped on ac- 
count and risk of Otis Everett, of Boston. 
The brig arrived in distress at Norfolk, a 
portion of the lead was sold to pay ex- 
penses, and the balance was transferred to 
the schooner Dusty Miller, for New York, 
a bill of lading was taken to deliver the 
property to Captain Collins, (which was un- 
doubtedly with a view to secure the freight 
and expenses.) and the captain of the schoon- 
er, by order of Collins, delivered the same 
to the defendants. Tufts, one of the origi- 
nal consignees, called on the defendants, 
who shewed him the bill of lading from 
Norfolk, made to Collins, and endorsed by 
him to the defendants, and told him that 
the lead had come to hand, and had been 
sold and the money received; that the con- 
tract of sale was made by Collins; that the 
defendants had become responsible tor the 
freight and average and had advanced mon- 
ey to Collins. It does not appear from the 
case, that they had ever accounted with 
Collins and paid over to him the balance 
after satisfying their responsibilities and 
claim; but the Inference Is. that they had 
the wliole proceeds of the sale then in their 
iwssesslon, or had appropriated the same to 
their own use. The circuit judge nonsuited 
(lie plalntirr. The questions argued by the 
counsel In the supreme court were, whether 
tlie plaint IIT had sufllclcntly jiroved his right 
to the property to iiialntnln the netlon; and, 
whether tlie defendrinls had a lien upon the 
same, and could retain It for the Hallsfaetlon 
of that Hen. The court, by .Tustlce .Sullier- 



RIGHTS IN STOLEX GOODS. 



fand, in deciding the case, held, that the 
evidence of the right, and the demand and 
refusal was sufficient; that Tufts, one of the 
oiiginal consignees, had full legal authority 
to do all that he did; and also, that the de- 
fendants had a lien on the property, which 
should have been paid or tendered before 
the suit was commenced; that the plaintiff's 
right of action was not complete until the 
lien was satisfied; and the court conclude 
by deciding that the plaintiff vra,s properly 
nonsuited. This, in fact, decides the whole 
case, and every question that could be prop- 
erly raised, or was raised, as appears from 
the report. There is no pretence that the 
property was feloniously taken from the 
plaintiff, for there is no principle better 
settled than that without an express agree- 
ment, the master of a ship is not bound to 
part with the goods until the freight be 
paid; and if the regulations of the revenue 
require the goods to be landed and deposited 
in a public warehouse, the master may en- 
ter them in his own name, and thus preserve 
his own or his owner's lien. In that case 
the defendants, by the assignment of the 
last bill of lading, stood in the place of the 
master; and the same rule also applies to 
the average on the loss. The court, how- 
ever, proceed to lay down some general 
principles, which they were not necessarily 
called upon to do by any of the facts or cir- 
cumstances in that case, as they appear by 
the report of it; and they say that "the dis- 
posing or assuming to dispose of another 
man's goods, without his authority, is the 
gist of this action; and it is no answer for 
the defendants that they acted under in- 
structions from another, who had himself 
no authority,"— and cite in support of that 
position the cases of 4 Maule & S. 259, and 
1 Burrows, 20, which have been before ex- 
amined and the bearing of them shewn. 
There is no doubt that the law as laid down 
by the supreme court, as to disposing of the 
goods or property of another, without au- 
thority, is correct; but in that case the de- 
fendants had authority to hold possession of 
the property under a lien. It is, however, 
but a general principle; and lilie all other 
general rules or principles has exceptions, 
which I have before adverted to. Every 
case attempted to be brought under it must 
depend upon its own peculiar state of facts 
as the same came out in proof, to ascertain 
whether it belongs to the rule, or attaches 
to one of the exceptions. That dictum, how- 
ever, which is incidentally mentioned in the 
course of the opinion of the court, together 
with a similar one in 8 Cow. 238, which was 
in a case of fraud, and not of felony, seem 
to have formed the basis of the subsequent 
decisions of that tribunal. And the next 
succeeding case is the first one that applies 
that principle in its broadest sense to the 
facts of the case. 

In Williams v. Merle, 11 Wend. SO, the 
facts were these: November 1, 1829, the 



master of a tow-boat, by mistake, took 4 
barrels of potashes from a warehouse in Al- 
bany, and discovering his mistake when in 
New York, delivered them to the clerk of 
the agents of his principals, who took them 
to an inspector's office on the 3d of Novem- 
ber following, obtained a certificate of in- 
spection, and on the Gth of the same month 
sold them to the defendant, a produce bro- 
ker, who purchased them for a Mr. Patter- 
son, at a fair price, and received the in- 
spector's certificate. On the 10th of Novem- 
ber, the defendant took the ashes from the 
inspector's office, and shipped them to the 
order of his principal. About the 1st of 
September, in the following year, the plain- 
tiffs demanded the ashes of the defendant, 
who refused to account for them, saying he 
had purchased and paid for them a year pre- 
ceding the demand. The circuit judge, Ed- 
wards, intimated his opinion, that if the de- 
fendant had acquired the property bona fide 
by purchase, in the regular course of his 
business as a produce broker, and had dis- 
posed of the same bona fide, pursuant to 
the instructions of his principal, before suit 
brought, the action would not lie. He, how- 
ever, refused to nonsuit the plaintiffs, and 
the jury, under his direction, found a ver- 
dict for the plaintiffs for the value of the 
ashes, and "interest. The case was brought 
to the supreme court for revision; and that 
court, in following up the general principles 
mentioned in the cases of Howry v. Walsh, 
and of Everett v. Coffin, decided that the 
defendant was liable, and that the owner 
of property cannot be divested of it but by 
his own consent, or by operation of law, and 
that the purchaser acquired no title. The 
circuit judge took such a view of the facts 
and of the legal principles which should be 
applied to them, as seems to commend itself 
to our common sense of justice; and such 
an one as the equity of the case would seem 
to require — which was to leave the plaintiffs 
to their remedy against those who actually 
converted and sold their jjroperty, and had 
appropriated the proceeds to their own use; 
but not allow them to sustain an action 
against an innocent party who was only the 
agent for the purpose of transmitting the 
property from the hands of those who had 
so converted it, to those of a third person. 
Not that there was any doubt about the 
general rule of law, as laid down by the 
court in reviewing the case; but because 
the defendant was in a business well known 
to the commercial community as an agent, 
a produce broker, transacting that business 
bou.a fide; and because the great and im- 
portant interests of the community required 
that those men should not be rendered lia- 
ble in damages for acts done by them with- 
out the intent of committing a violation of 
law. The reasonable presumption would be. 
that if such a doctrine should be sanctioned 
by the higher courts, and thus become the 
settled law of the land, these agencies would 



10 



PKELlillXARY CONSIDERATIONS. 



be broken up, to the great annoyance and 
expense, as well of the merchants as of the 
planters; thus affecting not only the com- 
merce but the agriculture of the country; or 
at the least be the cause of creating very 
serious impediments in the way of the trans- 
action of that business which has been for 
several years past peculiarly appropriated 
by that class of men; and which constitutes 
a very large amount of the whole business 
of the country. The only ground upon which 
a party should be held liable, is that he has 
the property or its value in his possession, 
or has with knowledge or under notice, il- 
legally disposed of it; and not by reason of 
having been the mere conduit for its trans- 
mission from one to another, and that with- 
out notice or knowledge of any claim hav- 
ing been set up to the property by a third 
person. I am inclined to think there is a 
slight mistake in the case as reported in re- 
lation to the doctrine held by the circuit 
judge; in which he is made to intimate that 
if the defendant had, in addition to the oth- 
er circumstances by him stated, "disposed 
of the property bona fide, pursuant to the 
instructions of his principal before suit 
brought, the action would not lie;" and that 
he intended to have been understood as in- 
timating, that if the defendant had in addi- 
tion to those other circumstances, disposed 
of the property bona tide, pursuant to the 
instructions of his principal before notice, 
or demand made, the action would not lie. 
That would make the doctrine conform to 
that deducible from the lOnglish cases, and 
to what I believe to have been the law in 
this state before the case of Mowry v. Walsh, 
8 Cow. 2:J8, which was decided in 182S, al- 
though I cannot see that the decision of that 
case, viewed in a proper light, militates 
against that rule. 

This disposes of the adjudged cases cited 
on the argument of this cause — there are 
however two cases referred to by the learned 
chief justice in delivering the opinion of tlie 
supi'(une court, which should here be noticed. 
The firet is that of Mowry v. Walsh, above 
mentioned. There goods were obtained from 
the plaintiffs by moan.s of a forged recom- 
mendation, and a i)riimisp to iiay whatever 
amount the plaintiffs might let him have. 
After thus obtaining the goods, the party ob- 
taining the grxMls, took them to Lansing- 
burgh, and sold them to the defendant for 
consideralile less than the prices which had 
been charged Iilni by the pl:ilntllTs, at the 
factory. The defendant's clerk however, tes- 
tified that the price paid was a fair one. 
The plaliifllTs Jifterwards demanded the 
goods, and the defendant refused to surren- 
der lliein and an action of trover was brought. 
Tho circuit jiulge held that the gcMids were 
oblalutsl fraudulently but not relonlo\is1y, and 
the 'lefi-ndant having bought tliem buna fide 
without notice of the frautl, the pliilnllfTH 
eoiild not recover; and a verdict was ren- 
dered for the defeMdant. The case was 



brought before the supreme court, and that 
court supported the decision of the circuit 
judge, and held that it was a case of fraud, 
and not of felony or larceny, and that the 
finding of the jury and the testimony estab- 
lished the fact that the defendant purchased 
without notice of the fraud; that although 
as between the original parties to the con- 
tract, the sale was void in consequence of the 
fraud, yet if that original fraudulent pur- 
chaser afterwards sold the goods to a bona 
tide purchaser without notice of the fraud, 
the property passed, and the court would pro- 
tect him in the possession thereof. Although 
this decides the whole case which was 
brought up for examination, the court also lay 
down the general principles of law as appli- 
cable to cases of stolen property — that if the 
goods were taken feloniously no title passed 
from the owners and they might pursue and 
take their property wherever found; that 
such is the law in England unless the goods 
are sold fairly in market overt, and that 
having no such market here, the sale can 
have no other effect than mere private sales 
in England. In deciding the case last men- 
tioned, the supreme court cite that of I'arker 
V. Patrick. 5 Term R. 71S, as being in favor 
of the defendant; which is the same case 
cited by the counsel for the plaintiffs in error 
on the ;u-gumeut of the question. In P,arker 
V. Patrick, the goods had been fraudulently 
obtained of the defendant and pawned to tlie 
plaintiff for a valuable consideration, with- 
out notice of the fraud. After the conviction 
of the offender, the defendant obtained pos- 
session of his goods, but by what means does 
not apijoar. The plaintiff brought an action 
for their recovery, and it was contended that 
he, although an innocent pawnee, could not 
recover, as he derived title through a fraud, 
and was like u peisou deriving title frmu a 
felon. But Lord Kenyon thought the cises 
distinguishable, and the plaintiff had a ver- 
dict. A motion to set aside the verdict was 
denied, and the court held that the statute of 
'M lieu. VITI. c. 21, did not extend to cases 
of fraud, but only to a felonious taking. By 
that statute th<' owner of stolen property was 
entitled to restitution upon the convietiou of 
the felon. But as that statute did not apply 
fo a fraudulent obtaining of goods, the owner 
was not entitled to reslitution-and the ques- 
tl(Ui was then, say our supreme court In com- 
menting upon that case, purely at ciuninon 
l.'iw. and the Innocent pawnee was allowed 
to recover against the ovvMior. Although in the 
slatenieut of that ease It Is said that It does 
not apiie.'ir by what means the defendant olv 
falned the possession of the gocKls, yet I 
think If Is evident from the opinion of the 
eoiu't that the olTeuder w;is prosecule<I for the 
fraud and convictc<l; and fluit thereupon tho 
I'liurt liefore whom he was tried, awarded 
re'illliitlon to the owner, and fhls view of the 
i-ase becomes the more Imporlaut. because 
fho main q\iesflon to which (he alfeullon of 
tho king's bench seems to have been called, 



RIGHTS IN STOLEN GOODS. 



11 



was whPtlier the statute of 21 Hen. VIII. ex- 
teuded to the case oL' goods obtained by 
fraud, so that restitution might be awarded to 
the owner upon couvietion; for if it did not, 
then the defendant had no right to the pos- 
session, and it was still in the plaintiff to 
wlioni th(^y had been pawned. For this rea- 
son it appe.'U's to me that the case is of little 
weight in settling the question on either side. 

It is insisted by the plaintiffs in error, that 
tlie same principles should apply equally to the 
cases of property obtained by fraud or felony, 
so far as innocent parties are concerned, and 
that the statute merging the civil action in 
the felony only applies as between the felon 
and the original owner of the property, and 
not to third persons. The courts, however, 
in England and in this country, have thought 
they saw some reasonable distinction be- 
tween those cases; and that the doctrine re- 
lating to the fraudulent acquisition of prop- 
erty, was not applicable to the felonious tak- 
ing of it. But recently, in the English court 
of common pleas, in the case of Sampliu v. 
.Vddy, Chief Justice Best virtually held that 
no such distinction existed. Our supreme 
court in adverting to that case in Mowry v. 
Walsh, S Cow. 2i0, thint the opinion of Chief 
.lustice Best, "certainly at variance with the 
settled principles of law." This shows at 
least, that there is a difference of opinion 
among sound lawyers on that point; and 1 
must confess that it appears to my mind very 
difficult to draw a satisfactory distinction be- 
tween the two cases: either the original own- 
er sliould be entitled to his property in both, 
or an Innocent vendee or party should be pro- 
tected as well in the one instance as the 
other. 

The other case cited by the chief justice, 
is that of Andrew v. Dieterich, 14 Wend. 32, 
decided in lS3.j; and is the first case in which 
the question as to the felonious acquisition 
of property came directly before the court. 
It was an action of replevin. The facts were, 
that one Simmons purchased of the plainliff 
a quantity of carpeting, for which he was 
to pay cash as soon as it was measured and 
the quantity ascertained; it was sent to 
him; after which, instead of paying for it, 
he absconded. Previous to absconding, he 
applied to the defendant who was an auc- 
tioneer of household furniture to sell his fur- 
niture, and obtained on it an advance of 
.?350, and gave the key of his house to the 
defendant. After the carpeting had been 
three weeks on the floor of the house, the de- 
fendant removed it and the other things to 
his auction room. The plaintiff demanded it, 
and the defendant refused to deliver it up 
unless his lien was discharged, upon which 
the suit was brought. Justice Oakley, of the 
superior court, on the trial, charged the jury 
that the defendant was entitled to a verdict, 
if they found there had been a complete de- 
livery of the property by the plaintiff to 
Simmons; and that when the defendant 
made the advance and took possession of it 



by way of pledge he was ignorant of any 
circumstances which ought to have put him 
on his guard as to the maimer in which Sim- 
mons had obtained it from the plaintitT; and 
that if they found such a delivery by the 
plaintiff to Simmons, the plaintiff could not 
recover on the ground that the property had 
been feloniously obtained. The jury found 
for the defendant. By this charge, the law 
was given to the jury, and they passed upon 
it, as it had been under.stood to have been 
settled by the previous decisions. But the 
cause having been brought to the supreme 
court, on exceptions taken to the judge's 
charge, that court reversed the jtidgment on 
the ground that the goods were obtained un- 
der false pretences, which was made felony 
by statute. This was one of the first cases 
decided under that law for converting civil 
remedies into criminal prosecutions, the ef- 
fect of which was to convict a man of a 
felony in the eye of the world in a civil 
action, to which he was not a party, and 
wliere he had no opportunity of making his 
defence. The extension of this questionable 
policy so much at variance with the common 
law whicli holds every man innocent until 
legally convicted, shows the necessity of com- 
ing back to the principle of the English 
courts, and of requiring a conviction of the 
offender before the prosecution of these civil 
remedies should be permitted, much less 
encouraged. In giving their opinion, the su- 
preme court to some extent affirm the law 
as it was before held, and say that "a fraud- 
ulent purchaser acquires no title as against 
the seller, but as possession is prima facie 
evidence of property, where the vendor has 
delivered possession of his goods with intent 
not only that the possession, but the prop- 
erty shall pass, a bona fide purchaser from 
a fraudulent vendee shall hold the goods in 
preference to the owner." With all due defer- 
ence to the opinion of the able judges of that 
court, I have understood the law to be a 
little different from that by them stated; 
that as between the original owner of the 
goods, and a subsequent bona fide purchaser 
from a fraudulent vendee, it is not made a 
question whether the owner delivered the 
goods with the intent that the possession or 
the property should pass; and that in cases 
where the delivery was merely conditional 
as between the original parties to the con- 
tract, as where the payment is to be made 
simultaneously with the delivery, but is 
omitted or evaded by the purchaser on ob- 
taining the delivery of the goods, although 
there the delivery is merely conditional, and 
the non-payment is an act of fraud entering 
into the original agreement, and rendering 
the whole contract void as between the buyer 
and the seller, yet as to a subsequent inno- 
cent purchaser from that vendee, it is not 
so; for if the owner indiscreetly parts with 
the possession to the vendee, he cannot aft- 
erwards reclaim the goods to the prejudice 
of the rights of subsequent bona fide pur- 



12 



PKELIMrXARY COXSIBERATIOXS. 



chasers or creditors of his debtor; for where 
one or the other of innocent persons must 
suffer, the law imposes the penalty upon him 
by whose fault the necessity exists. 

An auctioneer, does not claim the goods as 
his own, or assimie any right in or over or 
to dispose of the same as his own ijroperty. 
It is true he has a special interest in goods 
sent to him to be sold, and a lien on them, 
or their pi-oceeds, for the charges of sale, his 
commission, and the auction duty payable 
to the state; he may sue the buyer for the 
purchase money; and is responsible to the 
vendee for the fulfilment of the contract of 
sale unless he discloses the name of his prin- 
cipal at the time of sale; yet, for all other 
purposes, he is the mere agent for the trans- 
mission of goods from one set of traders to 
another. It appears to me unjust to charge 
him with the value of the goods sold in a 
case like the present; though I admit that 
if he had received notice that the property 
he was about to sell did not belong to his 
principal, and notwithstanding such notice 
he proceeded to sell, he ought to be held 
responsible to the real owner for the value 
of the property, or the amount of sales, as 
such owner might elect. In crimiual cases 
it is the scienter, or the intent, which con- 
stitutes the crime; and can it be just or 
equitable in a civil action to place an inno- 
cent man, an agent, one who is admitted to 
have acted without Icuowledge or evil in- 
tent, in a worse situation than one who Is 
arraigned for a criminal violation of the 
laws of his country? And to excuse the one 
from punishment if he has unwittingly or 
unintentionally violated those laws; and at 
the same time to mulct in damages the other 
for a technical illegal taking of another's 
property. It is not the fact that the law 
regard.s the intent only in strictly criminal 
cases, for the question of fraud at the com- 
mon law depends upon the motive. So If 
a person buys goods of another against whom 
he knows there is a judgment, and does not 
do it to defeat a creditor's execution, it will 
not affect his purchase. 

All the cited cases, and which I have pre- 
viously examined, show that there was a 
demand made before suit brought. In this 
case, it is not pretended that before Ihis suit 
was Instituted there was any demand what- 
ever made, the claimant rcsling alone ujion 
the legal principle that the sale was a con- 
voi-slon. I am satlsllcd, however, that a 
formal deniaml should have been made on 
those auctlnneers before this suit was 
brought; and that It sliould never be permit- 
ted that a person wUa comes Innocenlly Into 
the mere custody uf property, without cliilm- 
Iiig any title to It In his own riglil, and who 
by virtue of a public odlce conCcrreil ujuin 
biin by the Kovorninent of the country acts 
merely as agent for tlie sale of that prop- 
erty, and Is known as such to the world, 
Mli'iuld be lipid liable lo respond In damages 
to the person who may afterwards prove lo 



be the owner, without having at least the 
opportunity of settling with his aavor.<iary, 
or of paying the amoimt claimed without 
being charged with the additional penalt.v 
of the costs of a suit. 

I am still further satisfied, even allowing 
for the sake of argument that such formal 
demand had been made, that the plaintilTs 
in error, under circumstances like those ex- 
hibited in the present case, should not bo 
held liable; and the more especially so when 
the person who claims to be the owner, does 
not show that he has taken any pains, by 
advertisement or otherwise, to caution the 
community that the property in question has 
been feloniously taken from him; but per- 
mits them to receive it from the felon, and 
to pass it away to other hands, without the 
slightest intimation that the title does not 
accompany the possession in that as in all 
other cases. What reason can there be, that 
the principle which the courts have with so 
much justice adopted with reference to stolen 
bills of exchange and promissor.v notes, 
sliould not be applied to other personal prop- 
erty, equally the subject of mercantile trans- 
actions'/ Why not here as in the cases of 
those evidences of debt, hold the claimant 
bound to exercise due diligence in giving 
the public, notice of his loss; and leave the 
fact of proper diligence on his side, and of 
due caution on that of the defendant, for a 
jui-y to determine from all the circumstances 
of the case? Is it because in the case of 
bills of exchange and promissory notes, the 
endorsement passes the title? Then e<iually 
effective is the possession of goods to evi- 
dence the title in all cases, except where 
the com-ts have interposed, and held inno- 
cent parties liable because they had d<uio that 
which they believed was legal and right; and 
had no moans of knowing to the contrary 
but by that Information. 

It is also urged on the part of the plain- 
tiffs in error, and with strong reason for Its 
support, that although possession may not 
always be conclusive evidence of property 
In merchandize, yet when merchandize is 
abroad In a foreign country, the exigen- 
cy of commerce requires that possession 
should be considered as conclusive evidence 
of proport.v in all cases, where the purchaser 
acts in good faith, and without notice that 
the goods do not belong to him who Is in 
the possession of the same. This It would 
Bcem should be the rule, as the title of per- 
sonal property passes by the delivery; and 
In two thirds or even three fourllis of all that 
Is pa.ssed Ihrdugli the millions of hands Vwtli 
In this country ami in lOurope, no other mode 
of passing the title Is used. The public In- 
terest demtiiids that such a rule slionUl be 
adopted, or public notice sIxMild be required 
In ill! cases of the loss by felony of iiersonal 
I)roi)erty. Otherwise, I cinnot divest my 
mind of the Klioiig Impression which It has 
received, that a blow will be struck at the 
commercial lulercsis and pr(i.s|)erity of our 



EIGHTS IN STOLEN GOODS. 



13 



state, the extent of the evil effects of which 
it will be difficult to conceive. All who are 
in the least acquainttMl with the commercial 
relations of our country know that they are 
very extensive and important both with Eng- 
land and France and other counti'ies, amount- 
ing to many millions of dollars in the course 
of a year. SuiJpose for an Instance, that a 
man in either of those European countries 
should obtain goods by felony — for there are 
bad men all over the world— and consign 
them to a mercantile house in New York, 
one of the most respectable firms in that city, 
with directions to sell on his account and 
remit him the proceeds; and they, without 
any knowledge of the manner in which the 
goods have been obtained, receive and dis- 
pose of the same, and remit the avails as 
directed; and that some months after comes 
another person and claims those goods as 
his property, and In order to be parallel with 
the case under advisement, without saying a 
syllable to those merchants in New York, 
and without ever having given any notice 
to the world of his loss, he commences an 
action of trover against them. Would this 
or any other court hold them liable in that 
action? or would not a sense of justice and 
equity revolt at such a proposition? If sucb 
an action should be sustained, and a recovery 
had against such tirm under such circumstan- 
ces, no mercantile commission house could 
thereafter exist in the city of New York. 
Baltimore, so far as this question is affected, 
is a foreign city, and the state of Maryland a 
foreign state. The several states of the Union, 
it is true, have confederated for their mutual 
safety and good government, but in all mat- 
ters which relate to their internal police, legis- 
lative and judicial, they are as much foreign 
to each other as if situated on either side of 
the Atlantic; and therefore, in determining 
this important question, it should be done 
with a reference to the effect it is to have 
upon our foreign commercial relations. As 
I have before remarked, there has been no 
case, like the present, judicially determined 
by this court. Saltus v. Everett, 20 Wend. 
2G7, was not the case of property sent to an 
agent to be disposed of, and the proceeds 
remitted, but was the case of property con- 
verted here by a principal, between which 
two cases there is, in my judgment, a wide 
distinction, and involves the same principle 
as that of Everett v. Coffin, 6 Wend. 605. 

Having thus passed through with such an 
examination as I have deemed it my duty to 
give this matter, I have to add that the rule, 
as attempted to be established on the part 
of the defendant in error, is in my opinion 
too broad. Although I admit that the gov- 
ernment is bound to assist the rightful own- 
er of property in recovering the possession of 
it when it has been unjustly or feloniously 
taken from him; yet I insist that this should 
not be at the expense of an innocent person, 
without some notice, and especially in the 
present case, where the defendant in error 



kept the offender In his employment, in 
which he was at the time of the felony, al- 
though he had no charge of the goods; that, 
however, only serves to free him from a 
breach of trust, and is introduced for the 
purpose of showing it was a felony. The 
principle applies here with great force, that 
where one of two innocent parties must suf- 
fer, the law will impose the penalty upon 
him by whose fault the necessity exists. 
The defendant in error kept the felon in his 
employment, placed confidence in him, and 
the strong probability is that but for the fa- 
cilities which his employment in that store 
afforded him, the felony would never have 
been committed. At the civil law, when 
things were damaged or stolen by any of 
the servants belonging to a ship or an inn, 
the master of the ship or inn was held lia- 
ble to pay double the value of the goods so 
damaged or stolen to the person sustaining 
the loss; but when the damage or theft was 
done by a stranger, or by persons unknown, 
the master was simply obliged to make good 
the loss. The reason for this important dis- 
tinction is very evident. The master had 
in the fii'St instance placed those servants 
there, and reposed confidence in them, 
which was a voluntary act on his part, and 
he should therefore answer for the wrong 
he had done the community by employing 
improper persons, as, in most cases, the ex- 
ercise of an ordinary degree of caution 
would have enabled him to have become ac- 
quainted with the character and habits of 
his employees; but in the second instance, 
the master had not employed the person 
who committed the injury, or at least the 
fact that he had done so could not legally 
be brought home to him, still as the goods 
had been deposited with him, they should 
be forthcoming, or he should pay their val- 
ue, but no damages as in the first instance 
for the wrong he had done society by keep- 
ing about him untrustworthy servants. The 
application of this principle to the case in 
hand may be made with much facility and 
correctness. Although I fully assent to the 
legal propositions, that no title passes 
where a felon sells stolen goods even to an 
innocent purchaser, and that the owner is 
entitled to take his goods wherever he can 
find them, yet I can by no means assent to 
the inference sought to be drawn from those 
propositions: that an innocent agent who is 
not a purchaser, who claims no title to the 
goods in himself, but merely acts as a pub- 
lic auctioneer in disposing of them at a pub- 
lic and open sale, and under a public notice 
that he will do so, — who has paid over the 
proceeds of that sale, and delivered the 
property to the vendees before any notice or 
knowledge of the felony, and without any 
facts or circumstances to put him on his 
guard, and without any previous demand 
having been made upon him,— is liable in an 
action for the value thereof to the owner. 
For these several reasons, I think the judg- 



14 



PK KLIMIN AK Y CONSIDERATIONS. 



incnt of the supreme court shouUl be re- 
versed. 

By Senator VERPLANCK. TUe decision 
of this court last year, in the case of Saltus 
y. Everett. 20 Wend. 2G7, aclinowledged and 
confirmed the principle, that the owner of 
personal property cannot be divested of his 
rights, unless by his own act or his own as- 
sent; and that it is no defense against such 
a superior and original title for a subse- 
quent possessor, that he honestly purchased 
the goods in the course of trade from a per- 
son not authorized to sell them, though oth- 
erwise in lawful possession. In applying 
this doctrine to the present case, the follow- 
ing questions arise: The plaintiff below 
seeks to recover the value of his goods, not 
from one having them in possession and re- 
fusing to deliver them, or from one who sold 
for his own benefit, or otherwise converted 
them to his own use, but from auctioneers 
who received the goods without knowledge 
that they had been stolen, sold them and 
transmitted the proceeds to their supposed 
owner, who was in fact the felonious taker 
of the property. Are these innocent sellers 
liable to the true owner for the amount of 
his loss, or must his remedy be limited to 
following the goods themselves, and recov- 
ering them or their value from the person 
actually in possession under a defective 
title? 

The principle of the decision in Saltus v. 
Everett, and of the authorities on which it 
rests, apply with equal force to the present 
case. The policy of our law is to make 
every man look to the character of those 
with whom he deals, and who are respon- 
sible for the title of property in the articles 
bought and sold. If he does not do this, he 
must take the consequent risk. The sanie 
considerations of public policy apply to him 
who sells as the agent of anotlier. as to him 
who buys; both of them are to look to the 
cluiractcr of the person with whom they 
deal. If in this they are negligent, or have 
Ijeen deceived, (hoy must take the conse- 
quences whenever their rights come into 
conflict with those of any innocent sufferer 
l)y the act of the same guilty third party. 
-Xccordlngly the doctrine of our decisions is, 
tli.Tt the original and true owner of move- 
able property, who has not by his own act 
or assent given a color of title or an ap- 
parent right of sale to another, may recover 
ihe value of those goods fi-oinnny one liavliig 
llioni In jKissesHlon and refusing to deliver 
Ihem up, or who has api>lled Uicni to his 
own use, or has In any other way converted 
them, I. c. has chiinged the substance of the 
tilings In <|uestion. their churactor, use or 
ownership, to the Injury of the real owner. 
The ground of the action used for the piu'- 
poNe In not the nclujil possession of the 
moveables, luit some wrongful act relating 
to llieni: a tortious refiiHul to deliver 
them, n torlloiis taking, or else their wrong- 



ful conversion; which last is presumed up- 
on the refusal to give them up. and which 
is proved by a sale without authority. 
According to Lord Coke, in the oldest lead- 
ing case on this head, which still preserves 
its authority, Isaac v. Clark. 1 Bulst. 312, 
"there must be an act done to convert one 
thing into another," and a converting into 
money by sale has always been held to be 
within this definition. The very recent Eng- 
lish case. Peer v. Humphrey, 2 Adol. & E. 
495, recognizes this same doctrine. 

In the argument before us, it was very 
strongly urged that a rule of law, thus char- 
ging mere agents, would work great public 
injury as well as private iuiuslice; as it 
would extend to common carriers, ship mas- 
ters and others, through whose hands goods 
feloniously or wrongfully obtained might 
pass. There may be some cases going to 
that length, but they are not, in my judg- 
ment, within the principle or the policy of 
the rule, nor are they included in the older 
decisions, as, for instance, in the one just 
cited from Bulstrode. I cannot think the 
law charges one who had accidentally a 
temporary possession of goods without claim 
of proiJerty, and with which he has parted 
before demand. It requires a wrongful tak- 
ing or conversion of the thing itself to make 
the transaction tortious. The auctioneers 
who have sold the goods now in question 
have made such an unauthorized conversion, 
and must be answerable for the value. In 
tills instance the rule falls hardly upon in- 
nocent and honorable men: but looliing to 
general considerations of legal policy, I can- 
not conceive a more salutary regulation 
than that of obliging the auctiiuieer to look 
well to the title of the goods which ho sells, 
and in case of feloniously obtained proper- 
ty, to hold him responsible to the buyer or 
the true owner, as the one or the other ma.v 
happen to suffer. Were our law otherwise 
in this respect, it would alTord a facility for 
the sale of stolen or feloniously obtained 
goods, which could be remedied in no way 
so effectually as by a statute regulating 
sales at auction, on the principles of tlie 
law as we now hold it. 

2. It has lieen maintained with great abil- 
ity lliat the rule llius stated, though admit- 
ted to be true as to goods tortiously obtain- 
ed, does not ajiply to goods feloniously tak- 
en, and tliat damages for the conversion 
of such goods can be recovered only after 
conviction of the feh)n, and only from the 
person convening or refusing to deliver the 
goods after that time. In the present case, 
the felon was convicted, but the conversion 
and sale had taken place before the convic- 
tion. This gnunid was probably not taken 
before the supreme court, as It Is not no- 
ticed In the opinion dellveri"d In th;it court. 
1 am not (lullo clear whether this may not 
be the existing law of lOngland, and wheth- 
<'r an acll'in like the i)resent coidd at any 
time be maliilalned there. By the undent 



RIGHTS IN STOLEN GOODS. 



15 



niimiion law a pei'son robbed could regain 
his property only by an appeal of larceny 
nfter conviction. The statute, 21 Hen. 
VIII., gave the party robbed a right to im- 
mediate restitution after conviction. Sever- 
al decisions upon the act gave it a construc- 
tion in conformity with the old law of ap- 
peal. It was strictly held that the civil ac- 
tion was merged in the felony. After con- 
viction of the felon, the stolen goods could 
be reclaimed even if sold in marliet overt, 
and whoever sold them after that date was 
deemed a tortious converter. But it has 
been expressly decided that the owner who 
liad prosecuted the thief to conviction, can- 
not recover the value of his goods from one 
who bought them from the thief, and sold 
them again before conviction, even with no- 
tice. 2 Term R. 750. In the words of Chief 
Justice Best, In another case (Simpson v. 
\\'oodhert, 2 Car. & P. 41): "The law is 
(his: you must do your duty to the public 
Iiefore you seek a benefit to yourself; and 
tlien there is no necessity for a civil action. 
'l.'he decisions, says he, go not only to the 
case of an action against the felon, but also 
against persons who derive title under him. 
If such actions could be maintained, there 
would be no criminal prosecutions." The 
authority of these and similar decisions has 
been much shalien, and certainly much nar- 
I'owed in their application, by the case of 
Peer v. Humphrey, 2 Adol. & E. 495, de- 
cided in 1S35. There the court of king's 
bench held, that in trover for oxen felo- 
niously sold by a servant, their value might 
be recovered from the bona fide purchaser 
who had sold them again before conviction. 
In this case the authority and reasoning of 
Lord Kenyon in 2 Term R. 750, were over- 
ruled by his successor, the present Chief 
.Tustice Deniuan. 

But in my opinion, we are not called upon 
to reconcile these cases, or to decide between 
them, for whatever may be the law of Eng- 
land, it is quite clear that these peculiar ex- 
ceptions to the genei-al principle of the law, ob- 
taining on special grounds of policy, have no 
application within this state. Not only has the 
foundation of the doctrine been removed by 
the abolition of appeals of felony and of the 
former statutoi'y provision of restitution, but 
a contrary doctrine ha.s been expressly substi- 
tuted. The English law established the uni- 
versal rule that the felony excluded or sus- 
pended the civil suit until after conviction. 
Our Revised Statutes enact thus (part 3, c. 4, 
tit. 1): "The right of any person injured by 
felony, shall not in any case be merged in 
such felony or be in any manner affected 
tliereby." The first part of the section may. 
perhaps, by a strict construction, be confined 
to the action against the felon himself, which 
was formerly held to be merged in the felony; 
but the concluding words have no force or 
effect unless they extend to cases like the 
present. Chief Justice Best, as just cited, 
says: "The decisions go not only to the case 



of an action again.st the felon, but also against 
persons claiming under iiim." As the action 
against the felon is restored by the first part 
of the section, so tliat against persons claim- 
ing under him must be comprehended under 
the final words: "the rights of any pereon in- 
jured by any felony, shall not be in any man- 
ner affected thereby." The abrogation of the 
whole policy of the English law on this head, 
removes the only exception before known to 
the general right of the real owner to follow 
his property and recover its value in any 
hands whatever. But we need not rest merely 
on the general terms of this enactment. The 
whole policy of the statute of restitution up- 
on which the English decisions stand, has 
been altered in our statute. Instead of requir- 
ing a conviction before stolen goods are re- 
stored, lest (as Hale and Blackstone say) "fel- 
onies should be made up and healed," our Re- 
vised Statutes direct that "upon receiving sat- 
isfactory proof of the title of any owner, the 
magistrate who shall take the examination of 
an accused person, may order the same to be 
delivered to such owner." And again: "If 
stolen property shall come into the custody of 
any magistrate, upon satisfactory proof of the 
title of any owner thereof, it shall be deliv- 
ered to him." Finally, the English statute is 
in substance re-enacted, with this remarkable 
addition: "If the property shall not before 
have been delivered to the owner." These 
several provisions, taken in connection with 
the abolition of appeals of felony and of the 
merger of the civil remedy in the criminal 
prosecution, shew, I think, conclusively, that 
the English doctrine on this head, even in the 
more limited sense as laid down by Chief Jus- 
tice Denman, has no application in this state. 

If this view of the subject be correct, our 
own legislation here affoi'ds another instance 
of the gradually but increasing respect for the 
rights of original ownership against all other 
claims (even that of an innocent and appar- 
ently lawful possessor), which has marked the 
advance of civilized life. Chancellor Kent (2 
Kent, Comm. 320) has drawn a striking and 
philosophical outline of this advance. He has 
sliewn how, in the earlier ages of the Roman, 
the German, and the English law, the rights 
of the first proprietor of things moveable, 
when divested of his possession, had little 
preference over that of any other possessor un- 
der color of right; and how the respect for the 
rights of property kept on increasing in effi- 
cacy with social improvement and the corre- 
sponding advance of the law, from rudeness 
to refinement. 

3. It has also been urged before us that 
where merchandise is abroad iu a foreign 
state, the necessities of commerce require that 
possession shall be regarded as conclusive evi- 
dence of property in respect to a purchaser 
who acts in good faith. It has also been ar- 
gued that the cause of action arising in Mary- 
land, where the goods were sold, tlie decision 
of this cause might be governed or modified by 
the law of that state. The law of England, 



16 



PHELIMIXAKY COXSIDERATIOXS. 



as well as that of all those states where the 
common law forms the ground work of the 
local jm-isprudence, considers all pereonal ac- 
tions, whether ex contractu or ex delicto, 
wherever the cause of action arose, as tran- 
sitory, and subject to the law of the jurisdic- 
tion under which the parties are Utigant. It 
is a principle of the same law, peiTading the 
jm-isprudence of almost all civilized countries, 
that "moveables are governed by the law of the 
domieil of the owner." Lord Loughborough 
has stated the rule thus: "It is a clear prop- 
osition tliat personal property has no locality," 
which paradoxically sounding maxim he ex- 
plains to mean, that personal property "is sub- 
ject to the law which governs the person of 
the owner, both in respect to its disposition 
and its transmission." 2 H. Bl. 690. Our 
American decisions of interconfederated law 
(if I may use the phrase), fully sustain this 
principle. In cases of foreign contiacts, the 
law of the place of contract is recognized as to 
the force and effect of the contract itself; be- 
cause it is presumed to enter into the consid- 
eration of the parties, to fonu a part of the 
bargain, and to interpret its language and 
meaning. In other respects, rights as to per- 
sonal property are seldom governed by the lex 
rei sita;, or that of the jurisdiction whore it 
may accidentally be. whilst the owner dwells 
and the suit is brought elsewhere. Now, this 
is not a case of contract, but a question of 
ownei-ship and conversion. The same nile, 
therefore, must be applied to the sale of these 



goods in Baltimore as if they had been sold 
in Albany. There may possibly be cases where 
the same reasons of justice and policy which 
give authority in our courts to the foreign lex 
loci contractus may give similar weight to the 
lex rei sitie, so as to make the foreign law of 
the temporary locality of the moveables, vary 
that of the owner's domieil. The extent or the 
limitations of such exceptions to the general 
law we are not now called upon to decide. 
We have no evidence that the local law of 
Slaryland differs as to this matter from our 
own. The naked fact, that the goods were 
sold in another state, can have no effect to 
change or vary those rights of personal prop- 
perty which are prescribed by that which, in 
this case, is alike the law of the owner's dom- 
ieil, and of the jmisdiction In which he as- 
serts these rights. The judgment of the su- 
preme court should be affirmed. 

On the question being put. Shall this judg- 
ment be reversed? the members of the court 
divided as follows: 

In the athnu.itive— Senators FURMAN, 
HAWKINS, HULL, MAYNARD, WORKS 
-5. 

In the negative— THE CHANCELLOR, and 
Senators CLARK, EDWARDS, HUNT, HUN- 
TER, .TONES, H. A. LIVINGSTON, NICHO- 
LAS, PAIGE, PECK, POWERS, SKINNER. 
SPRAKER, STERLING, VERPLANCK, 
WAGER— 16. 

Whereupon the judgment of the supreme 
coiurt was affirmed. 



J. 



MABKET OVERT IN THE UNITED STATES. 



17 



GRIFFITH V. FOWLER. 

(18 Vt. 390.) 

Supreme Court of Vermont. Windsor. Jiily 
Term. 1846 

Trespass for tiiking a shearing machine. 
The case was stibiuitted upon a statement of 
tacts, agreed to by the parties, from which it 
appeared, that in 1836 the defendant, beinir 
the owner of the machine in question, lent 
it to one Freeman, to use in his business as 
a clothier, who was to pay a yearly rent tliere- 
for, and in whose possession it remained un- 
til the year 1841, when it was sold at sheriffs 
sale, on execution, as the property of Free- 
man, and one Iliclimond became the pur- 
chaser; that Riclimond, in .Tanuary, 1842, 
sold the machine to the plaintiff, wlio at the 
same time purchased of Freeman the build- 
ing, in which the macliine was situated, and 
took possession tliereof; and that the defend- 
ant, in rel)ruary, 1842, took the machine 
from the plaintiff's possession, claiming it as 
his property. The value of the machine was 
admitted to be fifty (iollars. Upon tliese facts 
the countycourt,— Hebakd, J., presiding, — 
rendered judgment for the defendant. Ex- 
ceptions by plaintiff. 

Tracy & Converse, for plaintiff. /. S. 
Marcy, for defendant. 

KEDFIELD, J. The only question re- 
served in this case is, whether a title to per- 
sonal property, acquired by purchase at sher- 
iff's sale, is alasolute and indefeasible against 
all the world, or whether such sale only con- 
veys the title of tlie debtor. 

There has long been an opinion, very gen- 
eral, I think, in this state, not only among 
the profession, but the people, that a pur- 
chaser at sheriff's sale acquires a good title, 
witliout reference to that of the debtor, that 
such a sale, like one in market ocert in Eng- 
land, conveys an absolute title. But, upon 
examination, I am satisfied that this opinion 
acts upon no good basis. 

So far as can now be ascertained, this opin- 
ion, in this state, rests mainly upon a dictum 
in the case of Heacock v. Walker, 1 Tyl. 338. 
There are many reasons, why this dictum 
should not be regarded, if the matter were 
strictly res Integra. It was a declaration of 
the chief justice in chaigingthe jury. Cases 
were then tried by the jury at tlie bar of this 
court, as matter of riglit, and in course, and 
before the law of the case had been discussed 
and settled by the court. In all tliese respects 
these trials differed essentially from jury tri- 
als at the bar of the higher courts in West- 
minster Hall. Such trials, there, being only 
matter of favor, granted in tlie most iuiport- 
ant cases, and after the law of the cases has 
been fully discussed, and settled by the court. 

The law given to the jury, in the two cases, 
will of course partake sometliing of the char- 
acter of the respective form and deliberation 
of the trials. Under our former practice, law 
laid down in tlie course of a jury trial, un- 
less when questions were reserved and far- 
GEiF.rEus.ruop. — 5 



ther dist'ussed upon motions for new trials, 
was not much esteemed, even when it was 
upim the very point in dispute. But espe- 
cially, the dicta of the judge, who tried the 
case, and who must, of necessity, somewhat 
amplify the bare text of the law, in order to 
show the jury the reason upon which it was 
based, could not be esteemed, as anything 
more than the hastily formed opinion of the 
judge — mere argument, to satisfy some jios- 
sible. or apprehended, doubt of the jury in 
regaid to the soundness of the main proposi- 
tion laid down. Such was the dictum re- 
ferred to. That, which was said of Chief 
Justice Tilghman, of Pennsylvania, is un- 
doubtedly good praise, when said of any 
judge; — "He made no dicta, and he 
*393 ^regarded none." There are sullicient 
reasons, why the dictum should not be 
regarded, if the thing were new. And we 
do not esteem the long standing of the 
dictum of any importance, unless it can be 
shown, that it has thus grown into a gener- 
ally received and established law, or usage; 
which, we think, is not the case in regard to 
this. For this court has, within the last ten 
years, repeatedly held, that a sheriff's sale 
was of no validity to pass any but the title 
of the debtor, when no actual delivery of the 
thing sold was made by the sheriff, at the 
time of sale. Austin v. Tilden et al., 14 Vt. 
325. Boynton v. Kelsey, Caledonia County, 
l.So6. S. P., l^amoiUe County, 1841. Since 
the first of these cases was decided, tlie 
main question, involved in this case, has 
been considered doubtful in this state, and 
we now feel at liberty to decide it, as we 
think the law should be, that is, as it is set- 
tled at common law. 

But the idea, that some analogy existed 
between a sheriff's sale and a sale in market 
overt is certainly not peculiar to the late 
Chief Justice Tyler. This opinion seems at 
one time to have prevailed in Westminster 
Hall, to some extent, at least; for in tlie case 
of Farrant v. Thompson, 5 B. & A. 82(3, [7 
E. C. L. 449,] wliich was decided in the 
King's Bench in 1822, nearly 20 years later 
than that of Ileacoek v. Walker, one of the 
points raised in the trial of the case before 
Chief Justice Abbott was, that the title of 
the purchaser, being acquired at sheriff's sale, 
was good against all the world, tlie same as 
•that of a purchaser in market ocert. This 
point was overruled, and a verdict passed 
for the plaintiff, but with leave to move to 
set it aside, and to enter a nonsuit, upon 
this same ground, with one other. This 
point was expressly argued by Sir James 
Scarlet, — who was certainly one of the most 
eminent counsel, and one of the most dis- 
criminating men of modern times, — in the 
King's Bench, and was decided by the court 
not to be w ell taken. Since that time I do 
not find, that the question has been raised 
there. 

It seems to be considered in Massachusetts, 
and in New York, and in many of the other 
states, that nothing, analogous to markets 



IS 



prelijNuxart considerations. 



ooert in England, exists in this country. 
Dame v. Baldwin, 8 Mass. 518. Wlieel- 
wriglit V. Depeyster, 1 Jolins. 480. 2 Kent 
324, and cases there cited. Nothing of that 
kind, surely, exists in tliis state, unless it be 
a sheriff's sale. And if the practice of hold- 
ing sales in market overt conclusive upon 
the title existed in any of the states, 
*it would be readily known. I con- *394 
elude, therefore, that Chancellor Kent 
is well founded in his opinion when he af- 
firms, that the law of markets overt does not 
exist in this country. lb. 

It seems probable to me, that the idea of 
the conclusiveness of a sheriff's sale upon the 
title is derived from the effect of sales under 
condemnations in the exchequer, for viola- 
tions of the excise or revenue laws, and sales 
in prize cases, in the Admiralty courts, eitlier 
provisionally, or after condemnation. Hut 
these cases bear but a slight analogy to 
sheriffs sales in this country, or in England. 
Those sales are strictly judicial, and are 
merely carrying into specific execution a de- 
cree of tlie court in rem, which, by univer- 
sal consent, binds tl.e whole world. 

.Soniettiing very similar to this exists, in 
practice, in those countries, whirh are gov- 
erned by the civil law; which is the tact in 
one of the American states, and in the prov- 
inces of Canada, and in most, if not all, the 
continental states of Europe. The projierty, 
or what is claimed to be the properly, of the 
debtor is seized and libelled for sale, and a 
general monition served, notifying all liaving 
adversary claims to interi>ose them before the 
Court, by a certain day limited. In this re- 
spect the proceedings are similar to proceed- 
ings in prize courts, and in all other courts 
pro- ceding iw rem. If no claim is interposed, 
the pioperty is condemned, by default, and 
sold; if sucli claims are made, tlicy are con- 
te>ted, and settled by the judgment of the 
court, and the rights of properly in the thing 
aie thus conclusively settled before the sale. 

i5ul with us nothing of this character ex- 
ists in regard to sheriff's sales. Even the 



right to summon a jury to inquire info con- 
flicting claims de bene e«ve, as it is called in 
England, and in the American states, where 
it exists, has never been resorted to in this 
state. And in England, where such a pro- 
ceeding is common, — Impey 153; Dalton 146; 
Farr et al. v. Newman et al., 4 T. R. tJ21, — ■ 
it does not avail the sheriff, even, except to 
excuse him from exemplary damages. Lat- 
kow v. Earner, 2 H. Bl. 437. Glossop v. 
Pole, 3 M. & S. 175. It is plain, then, that 
a sheriff's sale is not a judicial sale. Jf it 
were, no action could be brought against the 
sheriff, for selling upon execution property 
not belonging to the debtor. 

With us an excution is defined to be the 
putting one in possession of that, which he 
has already acquired bv judgment of 
*395 law. *Co. Lit. 154 (7,"(Tlioiiias' Ed. 
405.) But the judgment is of a sum 
in gross "to be levied of the goods and chat- 
tels of the del)tor," which the sheriff is to 
flnil at liis peril. The sale upon the execu- 
tion is only a transfer, by ojieration of law, 
of what the debtor might iiiniself transfer. 
It is a principle of the law of property, as 
old as the Institutes of .lustinian. Utnemo 
plus juris in alium transferre potest, quam 
ipse habet. 

Tlie comparison of slieriff's sales to the 
sale of goods lost, or estrays, in pursuance of 
statutory provisions, which exist in many of 
the stales, does not, in my opinion, at all 
hold good. Those sales undoubtedly transfer 
the title to the thing, as against all claims of 
antecedent property in any one, if the stat- 
utory provisions are strictly complied with; 
but that is in the nature of a forfeiture, arul 
is strictly a proceeding in rem, wherein the 
linder of the lost goods is constituted the 
tribunal of condemnation. 

There being, then, no ground, upon which 
we thiidc we shall be justified in giving to a 
sherilt's sale the effect to convey to the pur- 
chaser any greater title, than that of the 
debtor, the judgment of the court below is 
allirmed. 



CONFUSION OF GOODS. 



I'J 



GATES V. RIFLE BOOM CO. 

(38 N. W. 245, 70 Mich. 309.) 

Supreme Court of Michigan. May 18, 1888. 

Error to circuit court, Bay county; S. M. 
Green, Judge. 

Samuel G. M. Gates brought an action of 
trover and conversion of a certain quantity 
of wliite pine saw-logs against the Rifie 
Boom Company. Judgment for defendant. 
Plaintiff brings error. 

Holmes & Collins, for appellant. Hanchett 
& Stark, for appellee. 

MORSE, J. The plaintiff, in his lumbering 
operations, in 1882 cut over the line upon the 
adjoining land of Rust Bros. & Co., aud there- 
by secured and marked as his own about 
135,000 feet of logs belonging to the latter. 
These logs were mixed with the other logs 
of pkiiutiff, and banked on the west branch 
of the Rifle river. They were not nm out 
tlie following spring, but remained in the roll- 
way during the summer and fall of 1883. In 
tliat year Rust Bros. & Co. sent some scalers 
where the plaintiff's logs were, who selected 
(lut, as best they could, logs of the same 
(luality as those taken from the Rust lauds 
by plaintiff, and about the same quantity, 
and marked them with the stamp of Rust 
Bros. & Co. Sucli logs then bore two brands, 
tlie mark of plaintiff, "C. O. W.," and the 
Rust mark, "7 R. 7." Under the usual con- 
tract by plaintiff with the defendant boom 
company these logs, intermingled with other 
logs of the plaintiff, were driven down the 
stream in the summer of 1SS4. and received 
in the defendant's boom. The defendant was 
notified by Rust Bros. & Co. not to deliver 
the logs with the double marks upon them 
to plaintiff. The boom company thereupon 
delivered the double-marked logs, about l.j.3- 
000 feet, to Rust Bros. & Co., who, finding 
that more w'ere marked by their scalers than 
they were entitled to, returned to plaintiff 
20.590 feet of the same. The plaintiff', after 
demanding these logs of the boom company, 
and after its refusal to deliver them, brought 
this suit in trover in the circuit court for the 
county of Bay. The cause was there tried 
liefore a jury, and verdict and judgment 
passed for the defendant. The plaintiff in 
this court assigns as error the following in- 
stnictions given by the coiu-t: "If the plain- 
tiff cut the logs innocently, supposing them 
to be upon his own land, and mixed them 
with his own so tliat they could not bo 
identified, and after they became mixed with 
liis own, so that the logs cut from Rust Bros. 
>V: Co.'s lands could not be identified, then 
Rust Bros. & Co. had the right to select 
from the common mass a quantity of an aver- 
age quality of their own, equal to the quan- 
tity taken from their land." And also, in 
the same connection, after having stated the 
rule as to willful trespasses, instructing the 
jury further as follows: "But a different rule 



prevails where a party innocently mingles 
his property with that of another, and wliere 
it is undistinguishable, aud where the general 
quality and character of tlie property is the 
same, as in the case of the same kind of 
logs, white pine, if you please, aud of the 
same general quality as near as may be. 
There, if the logs are confused, neither party 
loses his own. B'oth parties have a right to 
their own, and neither party being able to 
distinguish his own, the i^arty whose prop- 
erty has been mingled with another's prop- 
erty by the act of that other party may take 
so much of the common mass as he has 
in it." 

It was claimed by the plaintiff upon the 
trial, and he so testified, that the logs taken 
by Rust Bros. & Co. were of greater value 
in quality than those cut by him from their 
lauds. The quantity cut by him on the Rust 
hinds was not claimed to be less than the 
quantity taken by Rust Bros. & Co. It there- 
fore became material to ascertain, upon the 
trial, whether the plaintiff was a willful tres- 
passer, or cut the logs innocently, in good 
faith, believing that he was within the lines 
of his own land. The court instructed the 
jury as to the dift'erence between a willful 
and an unintentional trespass, stating to 
them, in substance, that if the trespass was a 
willful one, if Gates knew he was cutting 
the logs of Rust Bros. & Co., and so, know- 
ing them not to be his, intermingled them 
with his own that they could not be dis- 
tinguished. Rust Bros. & Co. had a right to 
take more than their own, and if, in order to 
get all that belonged to them, and without 
intending to take more than belonged to 
them, they did take a better quality of logs 
than they had lost, if they did not make the 
selection with that view, the plaintiff could 
not reco\'er for such excess in quality; but 
if the plaintiff cut the logs, and marked and 
mingled them with his own, in good faith, 
believing them to be his own, then, if Rust 
Bros. & Co. took more than they were en- 
titled to, the plaintiff might recover the ex- 
cess. The counsel for the plaintiff very ably 
and forcibly contended in the argument here 
that if the plaintiff was innocent of any 
wrong, he was entitled to recover in this ac- 
tion, if Rust Bros. & Co. took no more logs 
in quality or quantity than were cut upon 
their lands, the difference between the value 
of the logs and the value of the standing tim- 
ber, that Ivust Bros. & Co. could claim no 
more than the value of the stumpage. He 
argues that if Rust Bros. & Co., under the 
same circum.stauces, had sued the plaintiff 
in trover for the value of the timber so cut, 
the measure of damages would have been the 
value of the stumpage. and that they could 
not have recovered what they obtained in 
this suit, the value of the logs, representing 
not only the value of the standing timber, 
but also the worth of the labor of plaintiff 
added thereto. Citing Ayres v. Hubbard, 57 
Mich. 322, 23 N. W. Rep. 829. The object of 



20 



PKELIMIXAKT COXSIDEEATIONS. 



the law being, in both cases, to enable the 
party, deprived of his property to receive 
compensation therefor, he asks, "Why should 
the man who strictly follows the law, and 
adopts a legal course of procedure" to obtain 
his property be in a worse position, and re- 
ceive less than he who uses force or strategy 
to recover possession of his proi^erty? He 
claims that in this case the plaintiff added 
innocently to the value of this timber the 
cost of cutting and initting in the loss, which 
was the sum of $2.2j per thousand feet, and 
also the value of the driving and booming 
charges. He estimates this value at over 
?;300. But in the first place it seems to me 
that this amount, the value of the plaintiff's 
labor and expenses upon the logs, could not 
be recovered in an action of trover. The 
logs were still the proj^erty of Itust Bros. & 
Co. The trespasser, however innocent, could 
acquire no ijroperty in these logs, nor could 
he acquire a lien upon them for such labor 
and expense. The conversion of trees into 
saw-logs by a trespasser does not change 
the title to the property, nor destroy the 
identity of the same. The owner of the land 
is the owner of the logs, and the trespasser 
has no title to them. Theiofore when he 
regains his own, he has converted no property 
of the trespasser to his own use. Stephen- 
son v. Little, 10 Mich. 433; Final v. Backus, 
18 Mich. 218-232; Mining Co. v. Hertin, 37 
Mich. 337; Arpln v. Burch, G8 Wis. 610, 32 
N. W. 681; Winchester v. Craig, 33 Mich. 
20."5; Grant v. Smith, 26 Mich. 201; Tuttle v. 
White. 4G Mich. 4SD, 9 N. W. 528. In 
tlie case of Mining Co. v. Uertin, 37 Mich. 
.337, the trespasser sought to recover in a 
special count in assunijjslt for the value of 
his labor expended in cutting the wood. In 
this case. If any action would lie for the 
labor of cutting the logs and the expense of 
getting them into the stream and down to 
the boom it would seem that the plaint! PC's 
remedy would be lik a.^snmpsit. But in the 
ciise above referred to It was lield that he 
could not recover the benellt of bis labor at 
all. There can be no doubt that the rule is 
well settled In this state that if Uust Bros. 
& Co. had taken possession of these logs 
Willie they were lying upon their lands, they 
would have been entitled to them as they 
were, and that no claim could have been 
made against them by the plaintiff for the 
labor and expense of cutting them. The 
Identity of the timber woiilil not then have 
been dest -oyed, and the subseciuent Inler- 
nilngling of these logs with the logs of plain- 
tiff, ailhougli innocently <Ione, could not 
change tho rights of the owners. The evi- 
dence Hhows that between the time Unst 
Bros. & (Ui. discovered the trcsp.'iss and the 
time they took i)ohrchhIou of the logs by 
uinrklng llicni, no 1,'ilior or money was ex- 
pended l)y tlie plnlntin' \ipon lliein. There- 
fore It follows tlial MH this case stood, the 
plaintiff had no claim upon Uust Brow. 
& Co. that lie could enforce In (his fwlion, 



unless they took possession of a better qual- 
ity of logs than he cut upon their premises 
and the same amount or more in quantity, 
and his trespass and intermingling of tlie 
property was innocently doUe. And the court 
was right in his interpretation of the law as 
to innocent trespassers. The seeming injus- 
tice pointed out in the argument of the plain- 
tiff's counsel is not an injustice, but the re- 
sult of the election of the owner to take less 
than he is by the law entitled to. The own- 
er of standing timber is not only entitled to 
the timber, but he has a right to it as it is, 
and to lieep it uncut if he so desires. No 
man, however innocently he may do it, can 
go upon his land and convert the standing 
trees into logs and charge him for the labor 
thus expended against his will, and perhaps 
against his real benefit. He may i)refer to 
have the timber to stand, and if left standing 
a few years may bring him immense profit. 
Such instances have not been rare in the his- 
tory of pine timber in this state. The sup- 
posed euliaucemcnt of his i)ropcrty by the 
labor of the trespasser may thus turn out to 
be a positive injury. There is no injii.<tice 
In holding that the trespasser must lose the 
labor he has expended in converting another's 
trees into logs. Such trespasses, though cas- 
u.al and not willful, are ordinarily, as was 
the trespass in this lase, the result of negli- 
gence upon the part of the trespasser, and 
there is no good reason why he should be 
recompensed for labor and expenses incuri-ed 
in the trespass when it might have been 
avoided by proper diligence. The owner has 
the right to reclaim his logs, but If he sees 
fit to bring an action of trespass or trover in- 
stead of regaining his property he volunta- 
rily puts himself within the rule of damages 
prevailing in such actions, and thereby elects 
to receive only a just and fair comiiensation 
for his piMi)crly as it was before the trespass- 
er inleriiu'ddlcd with it. The trespasser can- 
not comi]l:un of this, neither can he complain 
If he elects to take his property If he can 
find it. As was well said in Mining Co. v. 
Hertin, supra: "Nothing could more encour- 
age carelessness than tho acceptance of the 
principle that one who by mistake performs 
labor upon the projierty of another should 
lose nothing by his error." 

Tiie further and only question In the I'ase is 
the all"gc(l ei-ror of the circuit judge In reject- 
ing the oiler of the plaiuliff to piove by Harvey 
I'arker that while said I'arker was foreman 
for Ihc plaiiitilT. and was at work on the Sn- 
acro tract adjoining the lOacre tract dalmeil 
by Bust Bros, it Co., and before all of tho logs 
hail been hauled from tho strip of real eslali' 
In dispute in this ca.se, said McTavish and 
Cales then being at the camp. McTavish. 
wlille there, made no complaint or object Ion 
as to where they were culling; made no 
claim that plaintiff and his men hud com- 
niilled a trespass; and In answer to a question 
by said r.-iiKcr, after (Jules li;id gone away. 
.McTavish said the line plaiiil ilf's men had cul 



CONPUSIOX OF GOODS. 



21 



to was all right. And in sustaining the de- 
fendant's objection to the fulluwing question 
to the said Harvey Parlier: "Did yoii have 
any tallc with MoTavish about the line to 
which you had cut?" the counsel for the 
(jhiintiff claims that this evidence was material 
and competent as bearing upon the good faith 
of the plaintiff in cutting the timber; that it 
does not appear from the verdict of the jury 
whether they found such trespass willful or 
not. It was conceded that Rust Bros. & Co. 
took about the quantity of logs they were en- 
titled to, but if they took a much better qual- 
ity, as plaintiff claimed they did. and the tres- 
pass was found by the jury to have been an 
innocent one, the plaintiff's counsel claims that 
there should have been and probably would 
have been a verdict in his favor for the value 
of the excess in quality so fallen. In deter- 
mining the competency and materiality of the 
proposed proof it will be necessary to enter 
somewhat into the facts of the trespass. Mc- 
Tavisb was a land-looker, and a woodsman 
and general foreman, looking after the differ- 
ent lumber camps of Rust Bros. & Co., and 
looking after trespasses committed upon their 
lands, but not having any authority to locate or 
agree upon the boundaries of such lands. The 
plaintiff called upon McTavish, before he did 
any cutting, and asked him if he would go 
with him and see if they could not locate the 
line between his land and that of Rust Bros. 
& Co. He does not state that he supposed Mc- 
Tavish had any authority to locate the line. 
He says: "I had known him a good many 
years, and knew him as a man in the employ 
of the Rusts." "Question. You knew he was 
their agent and their woodsman? Answer. I 
believed him to be a good land-looker. I ask- 
ed him if he would go with me and see if we 
could locate the line between 28 and 29 north, 
of the quarter post. He said he knew where 
the south section corner of the section was. 
We will go there and see if we can find it." 
They went up into the woods, and undertook 
to run out the line. They disagree somewhat 
in their testimony. As they were pacing on 
the supposed line the plaintiff did some blazing. 
McTavish testified that he foi'bade this blaz- 
ing, saying to Gates that there was no telling 
whether they were right or not, as they were 
running the line out with a pocket compass. 
He says: "I told Mr. Gates at the time that 
there was timber enough along the line, who- 
ever lumbered there first, to have that line es- 
tablished by a surveyor, and he made the re- 
mark then that that line would be just a guide 
for him when he went in there again to know 



about where he was;" and they agreed that 
it should be surveyed before it was lumbered. 
Gates testified that he blazed the line they 
ran out. That at one point McTavish said: 
"I don't know, we may not be just right here, 
and perhaps you hadn't better blaze." I siiys: 
"It will be a guide to us to know where we 
have come, and .1 will continue the blazing 
until you get to the corner." That McTavish 
said that he was satisfied that was the right 
line, and said further: "That line is as correct 
a line as we can get through here; but as tim- 
ber is thick on the line down below between 
you and Rust you ought to have a surveyor 
run a compass course from this corner to this 
quarter post to be sure, as I have dodged a 
little in traveling north. We have come as 
straight as we could." To this. Gates says, he 
assented. No line, however, was run by a 
surveyor until after the cutting. Harvey 
Parker was the foreman of the plaintiff. Mc- 
Tavish was asked, on cross-examination, if he 
did not have a conversation with Parker about 
this line, and answered that he did not re- 
member it, but said that he stayed one night 
at his camps and presumed he told Parker 
that the plaintiff had cut to the line that he 
and Gates ran. Denied ever stating to him 
that the cutting was all right, or that they had 
the right line. This conversation, if any was 
had, was after the cutting of the logs. The 
offered evidence of Parker was rejected at 
first by the court upon the ground that it was 
not competent because it took place after the 
cutting. Parker afterwards testified that at 
the time of the talk the timber was all cut off 
of this strip belonging to the Rusts, and that 
some of the logs had been taken off; that 
Gates was not present when the conversation 
took place; and there was no evidence offered 
to show that Gates ever knew of the talk. 
Thereupon the court ruled that it was not ma- 
terial. We think the court did not err in the 
ruling. McTavish had no authority to bind 
the Rusts, and what he might have said after 
the trespass was committed could have no 
bearing upon the question of the good faith of 
the plaintiff, especially when there was no evi- 
dence that Gates was informed of what Mc- 
Tavish said. Nor was it admissible as im- 
peaching testimony not being material to the 
issue. 

The judgment of the court below must there- 
fore be affirmed, with costs. 

SHERWOOD, C. J., and CHAMPLIN and 
LOXG, JJ., concurred. CAMPBELL, J., did 
not sit. 



22 



PRELIJSiUXARY CONSIDERATIONS. 



WOOD et al v. PACKER. 

(17 Fed. 650.) 

CSrcuit Court, D. New Jersey. July 14, 18S3. 

In equity. 

F. C. Lowtlioip, Jr., for complainant. 
James Bucbanan, for defendant. 

XIXOX, J. This action is brouglit against 
tlie defendant for infringing certain reissned 
letters patent, No. t>,3(JS, dated August 31, 
ISSO. Tlie Delaware Coal & Ice Company 
was the owner of the original patent. No. 73,- 
684, and brought suit in this court against the 
same defendant for their infringement. It 
was found, upon examination, that although 
the patentee in his specifications stated the 
nature of his invention to consist in the fun- 
nel-shaped month attached to the cart, in com- 
bination with the chute and valve, he had 
failed to make any claim for such combina- 
tion; and as none of the separate constitu- 
ents, as set forth in the thiee claims, were 
new, the court was obliged to hold that the 
defendant was not shown to have infringed 
anything claimed in the complainant's pat- 
ent. Since then the original patent has been 
surrendered, and a reissue obtained, with 
quite a dilforent statement of the inventor's 
claims. They are as follows: (1) The com- 
bination of the body of a coal cart with a 
sliding extension chute, substantially as and 
for the purpose set forth; C2) the combina- 
tion of the body of a coal cart aud the outlet, 
having a gate or valve, with a sliding exten- 
sion chute, adapted to the said outlet, sub- 
stantially as specihed. 

The answer sets up three defenses: (1) 
That the reissue is void because the combina- 
tion claimed is an expansion of the original; 
(2) want of novelty in the patent; (3) non- 
infi iiigement. 

The second is tlie only one of these de- 
fenses which seems to have merit, or which 
has been the occasion of any serious or ex- 
tendwl inquiiT- Do the spei'illcations and 
claims of the patent as reissued indicate in- 
venlion on the part of the patenteeV The 
patent is for a combination, the constituents 
of wliich are staled In the claims above (piot- 
ed. There Is no dilTerence, In fact, between 
the claims, except that the second has one 
element which Is not named In the first, to- 
wlt. the outlet, having a gate or valve, and 
which Is tlic means of communication be- 
tween the lirst and third const llueiita of the 
comliliiatinn. its iibsenco gives much force 
to the argument of the learned counsel of the 
dereiKlaiit, that the tlrst claim Is void be- 
cauKc the parts are old, and there Is no de- 
pendence OP co-operntlon In their action 
wlien^by any new result Is obtained. A mere 
nKgrcgnllnii tif old things Is not pntentable, 
and. in the si-nsc nf the patent law. Is not a 
coinbliinllon. In a conibhuitlon. tlii> element- 
nl parts must be so united that they will div 
fiendiMlly <iMipi']iilc and produce sniiic new 



and useful result. A coal cart is not novel, 
nor is the chute for conducting coal from the 
cart to the place of its destination. These 
two instrumentalities are aggregated in the 
lirst claim; but no mechanism is suggested 
whereby the coal can be got out of the cart 
and into the chute. The complainant (Wood) 
testifies as a witness that it can bo acconi- 
plislied by tlie use of a man with a sliovel. 
This is probably true; but it is difficult to 
see how the inventive factilty is put in ex- 
ercise by any such arrangements. It is not 
necessary, however, to dwell upon this view 
of the case, because the entire reissue will 
not be avoided on account of the existence 
of one void claim. See Carlton v. BoUee. 17 
Wall. 403. 

The constituents of the second claim of the 
reissue are (1) the cart or wagon; (2) the out- 
let, with a gate or valve; and (3) the sliding 
extension chute. The patentee was asked 
whether he thought any of these elements, 
separated from the others, was novel, iCoin. 
Rec. 28, 20,) and replied, "I do not think tliey 
are, but only in combination." 

The case is then pi-esented here wliich was 
considered by the supreme court in Hailes v. 
Van Wormer, 20 Wall. 308. and in which Mr. 
Justice Strong, speaking for the whole court. 
sMid: •'.Ml the devices of which tlie alleged 
combination is made are confesseiUy old. No 
claim is made for any one of them singly as 
an independent invention. It must be con- 
ceded thiit a new combination, if it produces 
new and useful results, is patentalile, though 
all the constituents of the combination were 
well known aud in common use before the 
conibinatidu was made. But the results must 
be a product of the combination, and not a 
mere aggregate of several results, each the 
complete product of one of the combined ele- 
ments. • * » Merely bringing old devices 
into juxtaposition and then allowing each to 
work out its own effect, without the produc- 
tion of sonietliing novel, is not Invention." 

The ([ucslion, then, is in regard to the sec- 
ond claim of the compl;iinant's reissue: Is 
it a patennble combination, producing new 
and useful results, or Is it a mere aggrega- 
tion of old elements, each working out alone 
Its single individual effect? 

It Is not a question of easy solution, for -It 
re(iuires us to lind tlie exceedingly delicate 
lino whicli divides patentability from slnii)Ie 
inechanli'nl skill, or to i.sccrtnin the ditfcr- 
enco between real Invention and a double 
tise or aiipllcatlon of Hoiiictliing that has ex- 
isted before. Mr. Curtis, in section 11 of his 
tre.'itlse on the Law of I'litcnts, In discussing 
this subject, says: "The subject-matter of a 
supposed Invention Is new, in the sense of the 
patent law, wlii-n It Is siibstrinllally dItVcrent 
from wli.'it has gone before it; and this siib- 
Ntanllal difference. In ca.s(« where other an- 
alogotis ()r similar things have b<'en prevlou.s- 
ly known or useil. Is one measure of the sulll- 
cleney i>( Invention to support a i)atent. our 
courts liave, In truth, witliout always using 



PATENTS. 



23 



the samo terms, applied the same tests of the 
sufflcieucy of iuveiitiou which the Englisli 
authorities exhibit iu dotormining wliether al- 
leged inventions of various kinds possess the 
necessary element of novelty; that is to say, 
in detennining this question, the ch.iracter of 
tlie result, and not the apparent amount of 
skill, ingenuity, or thought exercised, has been 
examined; and if the result has been sul> 
stantially different from what had been ef- 
fected before, the invention has been pro- 
nounced entitled to a patent." 

If all improvements upon existing organ- 
isms were patentable, there would be no 
doubt about sustaining at once the complain- 
ant's patent. But sometimes better results 
are produced by mere mechanical skill, with- 
out the exercise of invention. The law does 
not extend to or cover such cases (Smith v. 
Nichols, 21 Wall. 118), nor where the change 
is only in degree, and not new. Guidet v. 
Brooklin, 105 U. S. 552; McMurray v. Miller, 
IG Fed. 471. 

The complainant's patent is undoubtedly a 
great improvement upon everything that went 
before it. The invention of William Bell (let- 
ters patent No. 14.301, granted Febniary 26, 
1S5()) was set up by the defendant as an an- 
ticipation, and it certainly contains valuable 
suggestions. His dumping wagon, however, 
could not be used for delivering coal in cellar 
windows, but only for dumping it into pave- 
ment vault-holes, where they happened to 
exist in front of houses, at a proper distance 
from the edge of the pavement, and it seems 
to lack adjustability for doing even this suc- 
cessfully. 

The evidence shows that Richard Hammell, 
a respectable citizen of Chambersburg, was 
formerly engaged in the coal business in 
Lambertville, New Jersey, and that as early 
as 1SG3 he was in the habit of using chutes in 
delivering coal from a wagon into a cellar. 
He thinks that he introduced the double or 
sliding chutes in the fall of 1805, and contin- 
ued to use them for 10 years. The narrow 
end of one passed into the wider end of the 
other. He used the double chutes when the 
distance for delivery was too far for the 
single. When the distance was greater than 
the single chute, they pushed them one into 
the other to adjust the length. When the 



distance was still greater, they had chutes 
that would reach any house. The longest 
single chute was 10 feet; by combining them 
they could reach 24 feet, or moie, if nece.s- 
sary. When more than one was used, they 
carried a light trestle to support them in the 
middle. « * * They had half a do/.en such 
chutes, and when they had occasion put them 
together. 

Peter C. HofC was also in the coal business 
in Lambertville, in the spring of 1867, and 
has continued therein ever since. He used 
chutes of different lengths, made tapering, 
and growing smaller to the end, which went 
into the cellar. The lower end would rest on 
the cellar window, or the place made to put 
in the coal. He used more than one at a 
time, but not frequently. He generally had 
three chutes, — one about 7 feet long, one 
about 12. and the other about 14 feet. Then 
if the place to put the coal in was 10 feet 
from the line of the street, he would use two 
chutes, would shove the small end of the one 
into the larger end of the other, with a trestle 
under where the connection was, and also 
a prop by the Avagon, — being a seat, board, or 
something similar,— in order to hold it up to 
let the coal run into the cellar. He used the 
14-feet chute and the 7-feet together in that 
way, which was about the longest distance 
he ever used the chute. But in all these 
cases the coal was shoveled fi-om the wagon 
Into the chutes, which were not attached to 
the wagon in any way. This testimony ex- 
hibits the state of the art when the complain- 
ant appeared with his improvement. He has 
not very largely exercised the inventive facul- 
ty in what he has done. His combination is 
so simple that it seems wonderful that other 
persons did not think of it. But they did 
not, and if it has effected any new and useful 
result the law protects him in its exclusive 
use. The evidence reveals that by his com- 
bination of old instrumentalities a load of 
coal can be emptied from a cart into a cellar 
•without the agency of a man using a shovel. 
This is a new result, worthy of the notice of 
the law, and it is the duty of the court to 
give to the patentee the benefit of his inven- 
tion. 

A decree must be entered for the complain- 
ant, and a reference made for an account. 



24 



PRELIMIXAHT CONSIDERATIONS. 



DRUMMOND et al. v. VENABLE et al. 

(26 Fed. 243.) 
Circuit Court, X. D. Illinois. Not. 9, 1SS5. 
In equity. 

Cobinn & Tliacher, for complaiuants. Of- 
field & Towle, for defendants. 

BLODGETT, J. This is a suit for infiinge- 
ment of patent Xo. 200,133, issued Februaiy 
12, ISTS, to James T. Drummond, for "an im- 
provement in marliing plug tobacco." The 
patentee in his specifications says: "The ob- 
ject of my invention is to mark plug tobacco 
in such a manner that the retail dealer can 
cut the lump into smaller plugs, or pieces of 
equal and definite sizes, and at the same time 
the -wrapper will be secured to the filling 
liy means of the marks or indentations. My 
invention consists in making the plug of to^ 
bacco with a series of indented lines upon its 
face or faces, which are arranged so as to 
space off the surface of the plug into subdi- 
visions of uniform and definite size and 
weight, whereby they become guides in cut- 
ting up the plug for retail sales, and which 
also serve to more firmly secure the wrapper 
to the filling, so as to prevent the starling of 
Ihe former from the latter. It is customary 
in the manufacture of tobacco to make plugs 
that weigh one pound. Plug tobacco is mostly 
retailed in pieces of one or two ounces in 
weight. It is more expensive to make up 
small plugs of these sizes, and conseciuently 
it is desirable to manufacture tobacco in large 
lumps, and let the retailer cut them up as he 
sells them. But the seller e-\periencos great 
inconvenience in cutting the plugs into pieces 
of just the desired quantity: hence guides 
:ire desirable to enable the dealer to cut from 
a large plug exactly an ounce, or two ounces, 
or any definite quantity, consisting of the 
imit of sale, or some nniltiple thereof. • • * 
ShiMild any other unit of sale be adopted, or 
should the plug be of different size, the size 
of the subdivisions should be varied corre- 
sjiondingly; but the marks are always placed 
so as to serve as accurate guides in cutting 
up the large lump. The lines may also be 
made in each face of the plug, and in fact this 
is desirable lu securing the additional func- 
tion of the indentations hereinafter specified." 
The claim of the patent is: "As a new article 
of niaruifactme, a plug of tobacco, one or Iioth 
faces of which are inaiked off by Indented 
linc.i. wlildi serve to secure the wnippor to llio 
tilling, and also as guides for cutting uj) the 
plug Into Ruinll pieces of definite size and 
weight, suliHtantinlly as and for the pur- 
IK)se set forth;" 



The defendant makes tobacco plugs of the 
same size and general appearance as the com- 
plainants, with creases stamped or impressed 
upon the face of the plug at uniform distances 
from each other, so that these creases serve 
as guides in cutting up the plug in measured 
parts for retailing. The defenses are (1) the 
want of novelty; and (2) that the defendants 
do not infringe. 

Jlucli of the testimony put into the record 
bears upon the question whether the complain- 
ant was or was not the first to invent and 
manufacture tobacco plugs marked with in- 
dentations to serve as guides for cutting the 
plug into measured quantities. This testi- 
mony is conflicting and contradictory, and, 
did I feel compelled to dispose of the case 
upon it, would require careful anaylsis and 
criticism; but I am satisfied from the proof 
tliat there is nothing new in this device. 
The proof shows that cakes had been made 
by bakers for many years before the alleged 
date of this invention, marked off with in- 
dented lines to show how to cut the same in 
measured quantities or pieces for retail. The 
same practice had been adopted in the manu- 
facture of chocolate, for the purpose of di- 
viding it into measured pieces for retail; and 
also in the manufacture of candies. 1 take it. 
very few men who are as old as I am, and 
whose early expeiionce was in the eastern 
states, will fail to remember the gingerbi-ead 
peddler, with his cards of gingerbread lined 
off in spaces where he was in the h.-ibit of 
breaking or cutting it off for the purpose of 
retailing it to the boys around his stand; and 
with this fact in reniembrauce it seems to 
me it could hardly be invention to simply 
mark a plug of tobacco so it could be cut off 
in equal and measured quantities. 

The record also shows a patent issued to 
.Tames Spratt, February 24, 1S74, for an "im- 
provement in pressing te.as for use," which 
consisted in pressing the tea leaves into a 
solid cake with indentations, so that the 
quantity needed for use at one time could bo 
readily broken off. .\ftor this device h.ad been 
applied to dllTercnt kinds of goods so as to in- 
dl<ate measiu'cd (luantltles. there could hardly 
be any invention in apjilying it to tobacco. But 
it is claimed there is an element of utility in 
these indentations, as applied to tobacco plugs, 
because It Is said they serve to fasten the 
wrapjier more firndy to the plug. The proof 
shows this claim of utility is, at least, doubt- 
ful; but even If fully supi)orte<l by the proof. 

It is manifestly incidental, and Is not the 

main punwise of the indentation. 
I llieref<ire feel comiielled to hold tliiti patent 

void, for want of novelty, and shall disndss 

the bill for want of ciiulty. 



PATENTS. 



25 



PHILLIPS et al. v. RISSER et al. 

(26 Fed. 308.) 

District Oourt, N. D. Illinois. June 29, 1885. 

In equity. 

Burnett & Burnett, for complainants. 
Poirce & Fisher, for defendants. 

BLODGETT, J. By this bill complainants 
charge defendants with the infringement of 
reissued letters patent No. 4,212, issued to 
complainant, December 20, 1870, for "an im- 
provement in wagon and car unloading ap- 
paratus," the original patent, No. 83,405, 
having been issued to Noah Swicliard, Oc- 
tolier 13, 1868. The leading feature in the 
device is the arrangement of two tilting 
bars with a platform in such manner that 
the wheels of the wagon or car to be unload- 
ed can be brought to rest on these bars, 
when, by tilting the bars, the body of the 
vehicle is tipped to such an angle as to 
cause the contents to slide or be dumped 
out by its own gravity. The defenses inter- 
jiosed are: (1) That the patent is void for 
want of novelty; (2) that the defendants do 
not infringe; (3) that the reissued patent 
is for a difCereut invention from that de- 
scribed in the original, and is such an en- 
largement of the specifications and claims 
of the original patent as to make the reissue 
void. 

The .proof shows a number of devices, pri- 
or to that covered by this patent, for unload- 
ing cars or trucks by tilting the platform 
on which they stand so as to cause the con- 
tents of the car to slide out or be dumiied 
into a bin or chute; but from the proof I 
conclude that Swickard was the first to pro- 
duce a device by which the wagon was tip- 
ped or thrown into an inclined position, by 
means of vibrating bars or rails, which oper- 
ated in connection with a fixed or stationary 
platform; and this arrangement seems to be 
particularly adapted to dumps for unloading 
bulk grain from wagons drawn by teams, 
as the team can pass readily upon the fixed 
platform, the wheels being so guided as to 
be brought to rest upon the rails or bars 
forming part of the vibrating platform. 

Most, if not all, the prior devices seem to 
have been specially adapted to unloading 
the contents of cars or trucks run upon rail- 
road tracks or tram-ways; but it is notice- 
able that Swickard specially states that his 
invention Is to be used for unloading wagons 
or cars, although he only shows it in use 
as arranged for unloading wagons. But it 
is suggested that if it is applicable to the 
unloading of cars it must be radically chan- 
ged; that, while an ordinary farm wagon 
stands upon wheels at such height that a 
sufficient Inclination can be obtained by 
dropping the hind end down until the rear 
axle strikes the fixed platform, the much 
.';uialler wheels of a car would cause the 
axle to strike the fixed platform before the 



requisite Inclination was secured. It is, 
however, undoubtedly true that the mere 
suggestion of this patentee that his machine 
can be used "for unloading wagons or cars" 
would not invalidate it as a wagon unloader, 
even if it should require inventive genius 
to adapt it to the unloading of cars; tliat 
is, it may not be used to unload cars, as the 
word "car" is commonly used, in contradis- 
tinction to "wagon," yet it may cover a 
valid device for unloading a wagon, and 
would be valid if it is applicable to one 
use, even if it is not applicable to all the 
uses suggested by the inventor. The proof, 
therefore, shows that there is some advan- 
tage in using these tilting rails instead of a 
tilting platform. I am of the opinion that 
defense of want of novelty is not made out, 
although I feel compelled to say that in my 
estimation there is much reason for doubt- 
ing whether it requires anything more than 
mere mechanical skill to adapt the older 
devices to the unloading of wagons. The 
patent, at least, must be construed to stand 
upon a very narrow basis. 

As before stated, the original patent show- 
ed two platforms; that is, a fixed platform, 
A, and a vibrating or tilting platform, work- 
ing in slots in the fixed platform, the pivoted 
balance bars being tied together at their for- 
ward end by a cross-board, which rested up- 
on the fixed platform when the movable one 
was level with the fixed one, so that the 
vibrating or tilting bars could not move or 
act independently of each other, but must 
raise or lower at the same time. The cross- 
board or plank, C, also acted as a stop to 
keep the forward ends of the tilting rails 
from dropping below the fixed platform, 
while, by the arrangement of the keys, E, 
E, they held the rear ends of the tilting plat- 
form in place until the wagon was drawn 
onto them, when, by means of a lever, these 
supporting keys were withdrawn, and by a 
slight effort, or the weight of the operator, 
the rear end of the movable platform was 
dropped to an angle required to slide the 
load from the wagon. Each of these tilting 
rails also contains a self-acting dog, G, 
which was intended to act as a check to pre- 
vent the wagon from running back after it 
had been drawn upon the platform; and, in 
order to guide the wagon onto the tilting 
platform, the lid of the hopper was made 
long enough to reach from inside to inside 
of the rail, and raised a couple of inches 
above the platform, so that it would serve to 
guide the wheels onto the tilting rails. 
There was also fixed to the forward ends 
of these tilting bars a bar or hook, which 
was intended to prevent the front end of 
the movable platform from rising higher 
than should be required to secure the neces- 
sary slope of the wagon for causing the load 
to slide out. 

The claims of the original patent were: 
"(1) The slotted platform, A. in combination 
with the pivoted balance bars, B, B, board, 



26 



PKELIMl.NAUy COXslDERATIONS. 



C, end-bars, I, I, and stops, H, H. all con- 
structed and operating substantially as and 
for the purposes herein set forth. (2) The 
pivoted balance bars, B, B, provided with 
one or more self-acting dogs, G, in combina- 
tion with the spring toggle keys, E, E, and 
key, F, all constructed and operating as and 
for the purposes herein set forth. (3) The 
arrangement of the slotted platform, A, bal- 
ance bars, B, B, and lid, D, to the hopper, 
substantially for the purposes set forth." 

It will be seen that the first claim is for 
the combination of these two platforms, the 
one fixed and the other capable of the tilt- 
ing motion described, with the cross-board 
which tied the forward ends of the tilting 
rails together, and the hooks or end-bars 
which limited the height to which the for- 
ward end of the tilting platform could rise. 
The second claim is for the tilting bars, pro- 
vided with one or more self-acting dogs, in 
combination with the keys, by which the i 
rear of the tilting platform was held in 
place while the wagon was being drawn 
onto it; wliile the third claim is for the two 
platforms and lid of the hopper arranged so 
as to act as a wheel-guide. 

The patent as reissued contains seven 
claims, and the infringement in this case is 
charged as to tlie first, fifth, sixth, and 
seventh claims. These claims, as to which 
infringement is charged, are as follows: "(1) 
The lilting platform, B, in combination with 
plalform or floor, A, as and for the purposes 
set forth. ♦ ♦ * (5) The combination of 
platforms, A and B, with a stop device. I, 
for the purpose set forth. (G) The combina- 
tion of platforms, A and B, with a receiving 
bin or chute, C, operated substantially as de- 
sci'ibod, for the purpose set forth. (7) The 
combination of platforms, A and B, with lid, 

D, for the purposes sot forth." 

It is conceded that the defendants have 
constructed grain dumps with lilting rails, 
each pivoted and working independently of 
the other, substantially like llio defendants' 
Model A, In evidence in this case, with some 
variation as to the mode of locking or stop- 
ping the rear cud of the rails in place, and 
one dump, like the defendant.*?' Model B, 
in which, as will be seen, the forward ends 
of the lilting rails are tied together by a 
cross-plank; and the first (nieslion I propose 
to consider as to (his branch of the case Is 
whether these dumps constructed by the de- 
fendants Infringe either of these claims of 
the reissued patent. 

Till! lli-st claim of the reissue Is for the 
tilling iilalform, B, In combination wlfli the 
llxed plalform or floor, A. In the siteclflca- 
tlona of the reissue It Is snld Hit? tilling plat- 
form Ih no onnstrucled "as that Its forward 
end Hliall rest uiion the slallonary pl.'ilforiTi." 
It must be obvious to any one who studies 
the opernllou of Ihese devices thnt some 
way innst be provided for holding the for- 
ward end of the movable platform ho that 
It will not fall below the llxed platform. 



The specifications of the reissue give no in- 
structions as to how the forward end of the 
tilting platform is to be constructed, so that 
it shall rest on the stationary platform; but 
the drawings show a cross-board which ties 
the forward ends of the two pivoted bars 
together, and this cross-board, when those 
forward ends drop to the level of the fixed 
platform, must rest on the fixed platform, 
and thus hold the movable platform level 
with the fixed platform. This mode of con- 
struction is clearly shown in Fig. 2 of the 
reissue drawing. It may, as I think, be cor- 
rectly said that this mode of construction 
shown in the drawings is only one mode, 
and does not limit the patentee to that mode 
of construction only; that is, he may, by the 
reissued patent, use any mode of construc- 
tion by which the forward end of the mov- 
able platform is made to rest on the fixed 
platform. The rails of defendants' dumps 
constructed according to Exhibit A rest upon 
a cross-timber fastened under the stationary 
platform; while the dump constructed ac- 
cording to Exhibit B shows the forward ends 
of the rails tied to.getlier, so that the cro.ss- 
board rests on the stationary platform. It 
seems to me, therefore, that the dumps of 
the defendant infringe this first claim; that 
is, they use the fixed and tilting platform 
acting together substantially as in the reis- 
sue, because tliese two pivoted rails working 
in their respective slots, when restin.g upon 
their front and rear bearings, fo'rm a plat- 
form, and when a wa.gon is driven upon them 
it stands luacticall.v upon a platform com- 
posed of these two rails and the bearing up- 
on which tliey rest. When the keys or locks 
of the rear ends of these rails are removed, 
then the platform can be tilted, and thereby 
the wagon put at such an angle as to dis- 
charge its load. The tie-bar shown In the 
defendants' dump, B, and in the drawing, is 
really inoi)erative and performs no function, 
if some other rest for the forward ends of 
the bar is provided, because tlie.se bars work- 
ing in their slot are all that are needed to 
hold the four wlu'cls of the wagon, and arc 
practically a platform of themselves, without 
regard to n tie-board or cross-board connect- 
ing their forward end. 

The fifth claim is for the combination of 
the platr<u'ms. .A and B, with the stop device 
or hook, l)y whi<'h the platform is prevented 
from tilting further than is necess'ary to un- 
load the wagon. The defendants do not use 
this slop device, and tlierefore do not In- 
fringe this combination. 

The sl.xtli cl:ilm Is fiu' the combination of 
the platforms, .\ and B, with the receiving 
bin or chule. As 1 shall have sonielliing to 
say about this claim In cunsldering the va- 
lidity of this relssiu", I will only say, In pass- 
ing, lh;il no sjjeelal form of receiving bin or 
dinle Is shown or described In the specifica- 
tions. The very Idea of dumping or unload- 
ing the conlenis of a wagon dv car presup- 
poses that the contents are to be dumped 



PATENTS. 



27 



into some receptacle; and it may well be 
doubted whetlier this claim is not too vague 
and uncertain to be upheld. 

The seventh claim is for the combination of 
the platforms A and B, with the hopper lid, 
D. This lid, D, as has been said, is arranged 
to act as a guide to run the wagon wheels 
upon the rails, and, as defendants use no 
such device, but h:ive dropped their vibrat- 
ing rails a slight distance below the surface 
of the fixed platform, so as to make sure of 
lunning the wheels upon the vibrating rails, 
the.v do not infringe this combination, their 
wheel guide being different from that pro- 
vided in the patent. I therefore conclude 
that the defendants' dumps infringe the first 
claim of this reissued patent. 

I now come to consider the validity of this 
reissue. It will be noticed that this reissue 
was apiilied for and made more than two 
years after tlie issue of the original patent, 
and the defendants insist that this case is 
by that fact brought within the cases of 
.Tames v. CampbelU and Miller v. Bridgeport 
Brass Co. 2 Complainants Insist, however 
that the clainis of the reissue are but a re- 
statement of the claims of the original pat- 
ent. A comparison of the original with the 
reissued patent shows that the specifications 
have been much amplified, and, to some ex- 
tent, new elements are introduced into them. 
For instance, in the original patent it is said: 
"A planli: or board, C, is secured to the front 
end of such bars, so that they cannot work 
independently or separate from each other, 
but must raise and lower at the same time." 
In the reissue it is said: "A tilting platform. 
B, so constructed as that its forward end 
shall rest upon the stationary platform, while 
the rear end, consisting of beams or bars, B, 
shall play within the openings or slots form- 
ed in the floor, so that, when required, the 
rear end of the platform may descend below 
the line of the floor." Here we have, as it 
seems to me, a radical departure from the 
mode of construction indicated by the origi- 
nal patent. The original imtent required 
imperatively that the forward ends of these 
tilting bars should be fastened together so 
that they could not work independently or 
separate from each other, but must raise 
or lower at the same time. By omitting 
this element from the reissue, the paten- 
tees have caused their device to cover a 
device which would not be covered by their 
original patent. Neither the claims of the 
original patent, nor the specifications, seem 
to anticipate any other form of construc- 
tion tlian one in which the vibrating bars 
should be fastened together at their for- 
ward ends, so that they could not operate 

1 Fed. Cas. No. 2,361. 

2 Fed. Cas. No. 9,563. 



indoi)endently or separate from each other. 
By the reissue all that seems to be required 
is that some rest or stop shall be provided 
to pi'event the forward ends of the vibrating 
rails from falling below the level of the fixed 
platform, and, as I have already said, the 
defendants so construct their dump that the 
forward ends of the vibrating rails rest upon 
a timber fastened to the under side of the 
fixed platform. Here is a new invention or 
different invention described and claimed 
from that described and claimed in the origi- 
nal patent. The original patent claimed a 
vibrating i>latform of a peculiar construc- 
tion, with certain elements in it. The re- 
issue claims a different vibrating platform, 
with less elements in it, and describes a 
vibrating platform not covered by the origi- 
nal specifications or claims. 

As. in considering the question of infringe- 
ment, I have held that the defendants only 
infringe the first claim of the reissue, it may 
not be necessary to consider the validity of 
the fifth, sixth, and seventh claims of this 
reissue; but I can hardly forbear the passing 
remark that the sixth claim of the reissue, 
which is for the combination of the two 
platforms with the receiving bin or chute, 
seems to me to be a most unwarrantable en- 
largement and expansion of the original pat- 
ent. The original patent contained no sug- 
gestion or description of a receiving bin or 
chute. The only possible allusion to it is the 
mention of the lid to the hopper; and yet, 
by the sixth claim of this reissue, an ele- 
ment which is not in the original patent, ei- 
ther by description or claim, is made one of 
the elements of a combination. It therefore 
seems to me that this reissued patent must 
be held void, as being for an invention not 
described in or covered by the original pat- 
ent. This patentee could not, by this reis- 
sue, add new features or omit old features, 
especially after the lapse of so much time 
from the issue of the original patent. 

The proof in the case shows quite conclu- 
sively that, at or about the time of the issue 
of this original patent, this kind of dumps 
or devices for unloading wagons came Into 
use, especially at elevators and coru-shelling 
warehouses at railroad stations, and it was 
found by practical expeiience that two pivot- 
ed rails so arranged that the wagon could 
be driven upon them, with proper stops to 
hold them in ijlace. and a device for the re- 
leasing of the stop when ready to dump, was 
all that was necessary for the purpose, and 
Sypes, McGrath. and other inventors entered 
the field with this simpler form of dump, 
whereupon plaintiff sought and obtained this 
reissue in order to cover this less compli- 
cated construction which others had intro- 
duced and proved useful. 

This bill is dismissed for want of equity. 



28 



PKELI.MINARY COXSIDEl'.ATIOXS. 



BARTLETTE v. CRITTENDEN et al. 

(Fed. Cas. No. 1,082, 4 McLean, 3(X).l 

Circuit Court, D. Ohio. July Term, 1S47. 

[In equity. Bill by R. M. Bartlette to re- 
strain A. P. Crittenden and others from in- 
fritigement of copyright Injunction grant- 
ed.] 

Mr. Walker, for complainant. Storer & 
iJwynn, for defendants. 

OPINION OF THE COURT. This is an 
application to enjoin the defendants from 
printing, publishing, or selling a work de- 
nominated "An inductive and practical sys- 
tem of double-entry book-keeping, on an en- 
tirely new plan," on the ground that a mate- 
rial part of the manuscript, and the arrange- 
ment, were the work of the complainant, and 
were pirated from him by the defendants. 
It appears that the complainant for twelve 
years has been engaged in teaching the art 
nf book-keeping, in the city of Cincinnati and 
other places. That he had reduced to writ- 
ing the system he taught, on separate cards 
for the convenience of imparting instruction 
to his pupils; and that he permitted his stu- 
dents to copy these cards, with the view to 
their own advantage and to enable them to 
instruct others. That .Touathan Jones, being 
(lualified in the school of the complainant, as 
a teacher, and having copied the manuscripts 
of the complainant, engaged, in counection 
with him. to leach a commercial school in St. 
Louis. AVhile thus engaged, A. F. Critten- 
den, one of the defendants, entered the school 
at St. Louis as a student, and was permitted 
to copy the manuscripts of the complainant, 
in the possession of Jones; and from those 
manuscripts, with certain alterations, he 
made up the first ninety-two pages of the 
book, under the above title, which was pub- 
lished in Philadelphia, in connection with his 
brother, by E. C. & J. Biddle, two of the de- 
fendants, In the present year. The answers 
of the defendants either deny the allegations 
of the bill, or do not admit them, and call for 
proof of the facts stated. On this motion 
for an Injunction the merits of the case have 
been discussed, with much research and abil- 
It.v. 

This application is made under the 9lh sec- 
tion of the act of congress of the ;{d of Feb- 
ruary, 18;{1, [4 Stat. 488.] which provides, 
that "any person or persons who slinll print 
or publish any manuscript whali'ver, without 
the consent ni' the author or legal proiiriclor 
lirst oblalned, etc., shall be liable to KUITer 
ami pay to the author or proprietor, all dam- 
ages opca.sloned l.v such Injury," etc. And 
power la given to gnint an Injuiictlim to ro- 
BtT.'iln the publlcMlloii. The llrst secllon of 
the net of the .'UMh of .Inne, IS.'M, |4 Slat. p. 
7"8, c. ir>7,] recpilres all di'eds or lnslninu>nts 
In writing for the trniisfor or nsHlgniiii'nl of 
ro|iy-rlglilH, to be ndinowlrdged and record- 
ed. At common law, liicli'pcnilenlly of tlie 
NtJitute, I have no doubt, the niiilior of a 



manuscript might obtain redress against one 
who had surreptitiously got possession of it. 
And on general equitable principles, I see no 
objection to reUef being also given, under like 
circumstances, by a court of chancery. But 
this is a proceeding under the statute. 

The defendants contend that the complain- 
ant, by suffering copies of his manuscripts to 
be taken, abandoned them to the public. The 
principle is the same, it is alleged, in regaril 
to copy-rights and patents. And that a con- 
sent or permission of the author to use the 
manuscripts, is as fatal to his exchtsive right, 
as the consent of the inventor to use the 
thing invented. Kundell v. Murray, [Saund- 
ers v. Smith,] 3 Mylne & C. 711, 7L*S, 730, 73."'>; 
Millar v. Taylor, 4 Bm-rows, 186, [2303;] Bar- 
field V. Nicholson, 2 Sim. & S. 1. To show 
the analogy between copy-right and patents, 
the defendants cited Whittemore v. Cutter, 
[Case No. 17,G01;] Melius v. Sillsbee, [Id. 9,- 
404,] in which the question considered was. 
did the inventor suffe^ the thing patented to 
go into public use without objection '.' Wal- 
cot V. Walker, 7 Ves. 1; Piatt v. Button, 19 
Ves. 448; Wyeth v. Stone, 1 Story, 273, Fed. 
Cas. No. 18,107. 

The 7th section of the act of the 3d of 
March, 18.39, [5 Stat. 3.54,] declares that a 
purchaser from the inventor of the thing 
invented, before a patent is obtained, shall 
continue to enjoy the same right after the 
obtainment of the patent as before it; and 
that such sale sliall not invalidate the pat- 
ent, unless there has been an abandonment, 
or the pm'cliase has bwn made more than 
two years before the application for the pat- 
ent Before this act a sale of the right 
would have been an abandonment to the 
public by the inventor. The decisions, there- 
fore, referred to, do not apply to cases aris- 
ing under this statute. A sale of the right 
is not an abandonment if made within two 
years before the application for a patent, as 
the law now stands; and it may be a mat- 
ter of some ditliculty, witliin tJie above lim- 
itation of two years, to determine what act 
shall amount to an abandonment. Where 
the act is accompanied by a declaration, to 
that eri'ect there can be no doubt; but if a 
sale be not an aliandonnu-nt, a mere acq\iies- 
cence In the tise of the Invention would 
seem not to be. Within the two years, to 
constitute an abandonment, the Intention to 
do so nmst be exiircssini or neci'ssaril.v im- 
plied from the facts and clrcuiiis(:inces of 
the ease. It Is a question of Inleiillon, as 
to the extent of the lici-nse, of which we 
nmst Judge, as we are t~all(Hl to do In other 
cases. But the limitation of two y<'ars does 
not apply In this case, should a copy-right 
be considered In i>rlnciple Idenllcal Willi an 
InvenlJon of a machine, n.s nu>re than two 
years have elapsed since copies of the coin- 
])lalnant'8 manuscripts were taken with his 
consent 

The question arises upon the farls staled, 
and MMisI 111- decided on general juMncipli's. 
In llie lirst pl:ice, there was no coiisenl of 



COPYRIGHTS. 



29 



the complainant, that his manuscripts should 
be printed. That thoy were not prepared 
for the press is admitted. They were with- 
out index or preface, although, as alleged, 
they may have contained the substantial 
parts of the complninant's system, which, 
in due time, he intended to print. Copies 
of the manuscripts were taken for the bene- 
fit of his pupils, and to enable them to teach 
others. This, from the facts and circum- 
stances of the case, seems to have been the 
extent of the complainant's consent. It is 
contended that this is an abandonment to 
the public, and is as much a publication as 
printing the manuscripts. That printing is 
only one mode of publication, which may be 
done as well by multiplying manuscript 
copies. This is not denied, but the inquiry 
is, does such a publication constitute an 
abandonment? The complainant is no doubt 
bound by this consent, and no court can af- 
ford him any aid in modifying or withdraw- 
ing it. The students of Bartlette, who made 
these copies, have a right to them and to 
their use as originally intended. But they 
have no right to a use which was not in 
the contemplation of the complainant and of 
themselves, when the consent was first 
given. Nor can they, by suffering others 
to copy the manuscripts, give a greater li- 
cense than was vested in themselves. In 
England, if .an invention be pirated and 
given to the public, it prevents an inventor 
from obtaining a patent. But this is not 
the construction of our laws. If an invent- 
or of a machine sell it or acquiesce in its 
public use, not within the limitation of the 
two years, he forfeits his rights. He must 
be diligent in making known and asserting 
his right, where it has surreptitiously got 
into the possession of anotlier, or he aban- 
dons it. This was the settled rule before 
the act of 1839, and it woidd seem that cases 
which do not come within the provisions of 
that act, must be governed by the old rule. 
No length of time, where the invention does 
not go into public use, can invalidate the 
right of the inventor. He may take his 
own time to perfect his discovery, and apply 
for a patent. And the same principle ap- 
plies to the manuscripts of an author. If 
he permit copies to be taken for the gratifi- 
cation of his friends, he does not authorize 
those friends to print them for general use. 
This is the author's right, ifrom which arises 
the high motive of pecuniary profit and liter- 
ary reputation. When the inventor consents 
to the construction and use of his machine, 
he yields the whole value of his invention. 
But an author's manusci-ipts are very dif- 
ferent from a machine. As manuscripts, in 
modern times, they are not and can not be 



of general use. Popular lectures may be 
taken do\Vn verbatim, and the person taking 
them down has a right to their use. He- 
may in this way perpetuate the instruction 
ho receives, but he may not print them. 
The lectm-er designed to Instruct his hearers, 
and not the public at large. Any use, there- 
fore, of the lectures, which shoidd operate 
injurioasly to the lecturer, would be a fraud 
upon him for which the law would give him 
redress. He can not claim a vested right 
in the ideas he communicates, but the words 
and sentences in which they are clothed be- 
long to him. 

It is contended that the manuscripts axe 
incomplete, and if published in their present 
state, could not be protected by a copy-right. 
That an unfinished manuscript or book, 
which gives only a part of the thing intend- 
ed to be written or published, can be of no 
value, and if printed no relief could be 
given, as no damage would be done. That 
the parts of a machine, in the process of 
consti-uetion, if pirated, would give no right 
to an injunction by the inventor. If the 
manuscript or machine referred to consisted 
of a mere fragment, which embodied no 
principle and pointed to no design, the pi- 
racy of it would afford no ground of relief. 
But such is not the character of complain- 
ant's manuscripts. They may not be com- 
plete for publication. Some explanatory 
notes may be wanting, to assist the reader 
in comprehending the system. This in- 
formation was communicated by lectures, 
and for the pm-poses of instruction in that 
mode, the notes were unnecessary. But the 
cards contain the frame work of the system. 
The substratum is there, and so exemplified 
as to show the principle upon which it is 
constructed. That it was valuable, is shown, 
from the fact of the cards having been used 
by the defendants in teaching the system, 
and in publishing them as they have done. 

The facts show the piracy beyond all 
doubt, and that it was done under euxum- 
stauces which admit of little or no mitiga- 
tion. The cards, as they well knew, had 
been, for a number of years, and were then 
being used by the complainant to instruct 
pupils. They had learned all they knew on 
the subject from the complainant. They 
probably knew that he intended to publish 
his plan. But this would, to some extent, 
at least, supersede the necessity of personal 
instruction. In disregard of these considera- 
tions, and of the obligations the defendants 
owed to the complainant, the publication was 
made. 

The coiu-t will allow an injunction unless 
a satisfactory arrangement shall be made 
between the parties. 



30 



I'KELIMIXAHY COXSIDERxVTIONS. 



CELLULOID MANUFG CO. v. CELLO- 
MTE MANEF'G CO. 

(32 Fed. 04.) 

Circuit Court, D. New Jersey. July 12, 1S87. 

Motion for preliiuinai-y injunction. 

Rowland Cox, for the motion. John R. 
Bennett, contra. 

BRADLEY. J. The bill of complaint in 
this ca.se states that the complainant was 
incorporated under the laws of New York 
in 1871, and has ever since that time used 
its corpni-ate name in carrying on its busi- 
ness of the manufacture and sale of various 
compounds of pyroxyline, adapted to dif- 
ferent uses and purpcses. and that its name 
has become of sreat consecpience in the good- 
will of its business, its standing, and the 
reputation of its goods; that, in order to 
designate its said manufactured product, and 
to distinguisli it from similar compounds 
manufactured by others, the complainant, 
from tlie first, adopted and used the word 
"celluloid," which had never been used be- 
fore, except to a limited extent by Isaiah 
S. and John W. Hyatt, by whom the word 
was coined, and who were engaged in the 
same manufacture at Albany, Xow Yorli. and 
used tlie word as a trade-mark; and when 
complainant was incorporated the said lly- 
atts entered into its employ, and assigned to 
it all tlieir rights relating to the business, 
good-will, and trade-mark; and complain- 
ant has ever since used the word "celluloid" 
as its trade-mark, by impressing or stamp- 
ing it into the surface of the articles made 
from the manufactured product, whereby it 
has acquired a high reputation as denoting 
complainant's manufacture, and indicating 
goods of superior <iuality, as comi)ared with 
like goods sold by other parties under the 
names of chrolithion, lignoid, p.nsbosene, etc.; 
tliat in 1873 complainant caused said word 
"celluloid" to be registered as a trade-mark 
In the United States patent-oflice, under the 
act in such case made and provided, and 
again registered in 1883, under the subso- 
qncnt act. The bill then complains that the 
defendant. In order to deprive the complain- 
ant of lis business and its rights, and to cre- 
ate an unfair competition, since the lirst day 
of Jantiary, 188(i, has adojited the name of 
Cellonlte Manufacturing Compan.v. with In- 
tent that it should be mistaken for com- 
plainant's name, and Intends to use It In 
ilie trnnsa<'llon of business similar to that of 
the com|il!ilii:int; that Ihc simllarlly of names 
will embarrass an<l obstruct the liusiness of 
the complainants, cause confusion and mls- 
tiiUe, divert complainant's custom, reduce 
lis .sales, and deceive the public; tli.-it the 
defendant has connnr-nced to erect works on 
nn extensive scale f'>r (lie niiinufacture of a 
compound f)f pyroxyllne, to be put ou sale 
under the name of "cellonlte," a name purely 



arbitrary, and adopted to enable the defend- 
ant to sell the article as complainant's prod- 
uce; that the corporators who formed the 
defendant company had previously been en- 
gaged in the manufacture of pyroxyline com- 
pounds under the name of "pasbosene," "lig- 
noid." "chrolithion," etc., but selected the 
new name, "cellonlte," in order to trade upon 
the complainant's reputation, and to sell its 
product as the complainant's, and intends to 
.stamp its goods with the word "cellonlte," 
in imitation of the stamp on complainant's 
goods, in order to sell them as complainant's 
manufacture. The bill prays an injunction 
to prevent the defendant from using the word 
"cellonite." or an.v imitation of the word 
"celluloid." The allegations of the bill are 
verified by affidavits and exhibits. 

The defendant has fi'.ed an answer. In which 
it denies that the complainant lias any right 
to the exclusive use of the word "celluloid:" 
alleges that many companies use it In i^eir 
names, as "Celluloid Brush Company," " cel- 
luloid Collar & ('nff Company." etc., which 
liave been allowed by complainant without 
dbjection. It admits the selection and use of 
the word by the coniplainant. but denies any 
exclusive right to the use of it. because it has 
become a part of the Ihiglisli language to 
designate the substance celluloid, and the 
impression of the word on the articles manu- 
factured by complainant merely indicates the 
substance of which they are composed. It 
denies th.it the word "cellonite" was adopted 
for the purpose of imitating the name of 
complainant, or the name stamped on the 
complainant's goods. It avers tliat the word 
was adopted as far back as 18s;?. and has 
been continuously used ever since, not to 
imitate the word "celUilold." but selected as 
better describing the exact nature of the 
pyroxyline compound used by the defendant; 
the same being a compound of the well- 
known substances cellulose and nitre, "cel- 
lonite" being merely a compound derivutive 
of those two words; that the defendant aban- 
doned the use of the words "pasbosene," "lig- 
noid," etc., because those words gave no In- 
formallon as to the chemical constituents of 
the conijiounds designated by them. It al- 
leges that it has for four years been engaged 
In maniifacluriiig and selling goods marked 
"Oellonile," and until now no attempt h.is 
been made to IntiM-l'ere with It. To show thai 
the word "celluloid" is a word of common 
use. the answer dies various patents an<l 
books, (but all sulisiNiueiit to 1873,) also the 
rules of the patenldllice as to the classes of 
invendons. In which one of llie sub ilasses 
is "Celluloid." 

The only verl Heat Ion of the answer Is the 
oalli of J. R. France, an olllcer of the com 
pany, who swears that the contenis are trin'. 
so fiir as they are within his knowlcdgi'; and. 
so far !is stated on Inforiiialioii .'iiid bellrr. 
he believes them to be true. 

The answer virtually admits that the cor- 



TRADEMARKS. 



31 



Ijorators of tho defoiulant bad been engaged, 
before the formation of the defendant com- 
pany, in tlie same manufacture, and had call- 
ed their produce, "pasbosene," "lignoid," etc.; 
and that they adopted the word "cellonite," 
instead of those designated, for the reason, 
as the answer says, that it is more expressive 
of the constituents, cellulose and nitre. This 
is a somewhat singular explanation. The ter- 
Hjination "ite," in chemistry, has a technical 
application nothing to do with the word 
"nitre;" and, notwithstanding the denial of 
tlie answer, (which, however, cannot be re- 
garded as verified by oath,) the inference 
strongly pvesses itself that the name was 
ailoptcd on account of its similarity to "cel- 
luloid." as the complainant charges. 

In alleging that the word "cellonite' has 
been used by the defendant since 1883, the ue- 
fendant, which was not incorijorated until 
May, ISSO, identifies itself with the previous 
association, shown by the affidavits to have 
licen called the "Merchants' Manufacturing 
I 'niupany," composed of the same corpora- 
I'irs. who abandoned the old name, and as- 
sumed the new one, for some purpose or 
I'lher. The explanation given for so doing is 
not entirely satisfactory. Here are two lacts 
slanding side by side: First, the fact that the 
I'elluloid Jlanufacturing Company, — an old, 
well-established concern,— is doing a large 
and prosperous business, with a good-will 
resulting from many years of successful ef- 
fort, and calls the product of its manufacture 
"celluloid," which has become such a popu- 
lar designation that, as the defendant says, it 
has become incorporated in the English lan- 
guage; secondly, the fact that the Merchants' 
Manufacturing Company, which prodiiees 
substantially the same article, and calls it by 
different names, "pasbosene," "lignoid," etc., 
(with what success we are not told,) sudden- 
ly changes its name to that of Cellonite Man- 
ufacturing Company, and calls its produce 
••cellonite." It will take a great deal of ex- 
planation to convince any man of ordinary 
business experience that this change of name 
was not adopted for the purpose of imitating 
tliat of the old, successful company. 

It is the object of the law relating to trade- 
marks to prevent one man from unfairly 
stealing away another's business and good- 
will. Fair competition in business is legiti- 
mate, and promotes the public good; but 
an unfair appropriation of another's business, 
liy using his name or trade-mark, or an imi- 
tation thereof calculated to deceive the pub- 
lic, or in any other way, is .iustly punishable 
by damages, and will be enjoined by a court 
of equity. The question before me is wheth- 
er the law has been violated in the present 
case. 

First. As to the imitation of the complain- 
ant's name. The fact that both are coi-po- 
rate names is of no consequence in this con- 
nection. They are the business names by 
which the parties are known, and are to De 



dealt with precisely as if they were tho names 
of private firms or partnerships. Tlio de- 
fendant's name was of Its own choosing, and, 
if an unlawful imitation of the complain- 
ant's, is subject to the same rules of law as 
if it were the name of an unincorporated 
firm or company. It is not Identical with the 
complainant's name. That would be too 
gross an invasion of the complainant's right. 
Similarity, not identity, is the usual recourse 
when one party seeks to benefit himself by 
the good name of another. What simiiaruy 
is sufficient to effect the object has to be 
determined in each case by its own circum- 
stances. We may say, generally, that a sim- 
ilarity which would be likely to deceive or 
mislead an ordinary unsuspecting customer is 
obnoxious to the law. .Judged by this stand- 
ard, it seems to me that, considering the na- 
ture and circumstance.s of this case, the name 
"Cellonite Manufacturing Company" is suffi- 
ciently similar to that of the "Celluloid Manu- 
facturing Company" to amount to an In- 
fringement of the complainant's trade name. 
The distinguishing words in both names are 
rather unusual ones, but supposed to have 
the same sense. Their general similarity, 
added to the identity of tho other parts of 
the names, makes a whole which is calculat- 
ed to mislead. 

Secondly. As to the complainant's alleged 
right to the exclusive use of the word "cel- 
luloid" as a trade-mark, and the defendant's 
alleged imitation thereof. On this branch 
of the case, the defendant strenuously con- 
tends that the word "celluloid" is a word 
of common use as an appellative, to desig- 
nate the substance celluloid, and cannot, 
therefore, be a trade-mark; and. secondly, 
if it is a trade-mark the defendant does not 
infringe it by the use of the word "cellonite." 

As to the first point, it is undoubtedly true, 
as a general rule, that a word merely de- 
scriptive of the article to which it is ap- 
plied cannot be used as a trade-mark. 
Everybody has a right to use the common 
appellatives of the language, and to ap- 
ply them to the things denoted by them. 
A dealer in flour cannot adopt the word 
"flour" as his trade-mark, and prevent oth- 
ers from applying it to their packages of 
flour. I am satisfied from the evidence ad- 
duced before me that the word "celluloid" 
has become the most commonly used name 
of the substance which both parties manu- 
facture, and, if the rule referred to were of 
universal application, the position of the de- 
fendant would be imassailable. But the spe- 
cial ca.se before me is this: The complain- 
ant's assignors, the Hyatts, coined and 
adopted the word when it was unknown, and 
made it their trade-mark, and the complain- 
ant is assignee of all the rights of the Hy- 
atts. When the word was coined and adopt- 
ed, it was clearly a good trade-mark. The 
question is whether the subsequent use of It 
by the public, as a common appellative of 



PRELIMIXAHY COXSIDEKATIOXS. 



the substance manufactured, can take away 
the complainant's right It seems to me 
that It cannot. 

As a common appellative, the public has a 
right to use the word for all purposes of 
designating the ai-ticle or product, except 
one, — it cannot use it as a trade-mark, or in 
the way that a ti-ade-mark is used, by apply- 
ing it to and stamping it upon the articles. 
The complainant alone can do this, and any 
other person doing it will infringe the com- 
plainant's right. Perhaps the defendant 
would have a right to advertise that it man- 
ufactures celluloid. But this use of the 
word is very different from using it as a 
trade-mark stamped upon its goods. It is 
the latter use which the complainant claims 
to have an exclusive right in; and, if it has 
such right, (which it seems to me it has,) 
then such a use by the defendant of the 
word "celluloid" itself, or of any colorable 
imitation of it, would be an invasion of the 
complainant's right. As a trade-mark it in- 
dicates that the article bearing it is the 
product of the complaiuanfs manufacture. 
If another party uses it in that way, it in- 
dicates a falsehood, and is a fraud on the 
public, and an injury to the complainant. 
The essence of the law of trade-marks is 
that one man has no right to palm off, as 
the goods or manufacture of another, tliose 
that are not his. This is done by using that 
other's trade mark, or adopting any other 
means or device to create the impression 
that goods exhibited for sale are the product 
of that other person's manufacture when 
they are not so. 

Tlie subject is well Illustrated by the case 
of McAndrew v. liassott, 4 Do Gex, J. & S. 
380. The plaintiffs produced a new article 
of liquorice, and stamped the sticks with the 
word '■.\natolia," some of the juice from 
which they were made being brought from 
-Vuatdlia, in Turkey. The article becoming 
very popular, the defendants stamped their 
liqucu'ice sticks with the same word. Being 
sued for violation of plaintiffs' trade-mark, 
one of their defenses was that no poison has 
a right to adopt as a trade-mark a common 
word, like the name of a comitry where the 
article is produced. _I»rd Chancellor West- 
bury said: "Tliat argument is merely the 
repetition of the fallacy which I have fre- 
quently had occasion to expose. Projjcrty 
In the word, for all puri)iises, caiiMnl e.\ist; 
but property In that word, as applied by way 
of stamp upon n particular vendible, as a 
stick of li(|U(irice. does exist the moment the 
article goes Into the market so stamped, and 
there obtains acceptance and reputjitlon, 
whereby the stamp gets currency as an In- 
illc nlloM of superior qunllly, or of smne other 
clrcuinslaiice which renders tlic article so 
Htanqied n<i-eplabl(' to the |)ubllc." Page 

Another case throwing light on the sub- 
ject Is Hint of Hinder Machine Miunifg Co. 



V. Wilson, 3 App. Cas. 376. There the de- 
fendant, a manufacturer and vendor of sew- 
ing-machines, inserted in his price-list, among 
other articles for sale, the "Singer Sewing- 
Machine," and sold machines by that name, 
but having his own trade-mark upon them. 
The plaintiff sued him on the ground that 
by a Singer sewing-machine was understood 
in the community a sewing-machine made 
by Singer, the inventor, or by the plain- 
tiff, his assignee and successor in business. 
The plaintiff contended, therefore, that the 
advertisement was a fraud on the public, 
and an invasion of its exclusive right to 
the name "Singer." The defendant contend- 
ed that the terms "Singer Sewing-Machine" 
meant a paiticular kind of machine, (which 
he described,) irrespective of who manufac- 
tured it; that the wo-d "Singer" had come 
to be descriptive in its character, and would 
not have the effect attributed to it by the 
plaintiff. The judges who delivered opin- 
ions in the case, held that if the use of the 
name "Singer" gave the public to under- 
stand that the defendant sold machines 
made by the plaintiff, it was a wrong done 
to the plaintiff; but that if the name had 
come into common use as a name of a par- 
ticular kind of machine, irrespective of the 
maker, the defendant had a right to use it 
in his advertisements in that sense, using 
his own trademark on the article itself; 
and it was held by all the judges that it 
was a matter to bo determined by evidence 
whether the use of the name in the adver- 
tisement had the one effect or the other. 

This, it will be observed, was a case of 
advertising, and not of imitating a trade- 
mark. Still, if it had the same effect, it 
was held to be equally culpable. The case 
does not decide that, if the word "Singer" 
had been the plaintilT's trade-mark, any 
cliange in its use would have affected such 
trade-mark, but does decide that an exten- 
sion of its use might render the word harm- 
less in an advertisement. 

The defendant's counsel in the present 
case placed great reliance on the decision In 
Cloth Co. V. Cloth Co., 11 H. L. Cas. 5-23. 
After carefully reading that case, I do not 
see that it necessarily governs tlie present. 
No (juostlon was made as to the names of 
the companies. The trademark there was a 
large circular label slanipi^l upon the cloth, 
containing, witiiln Its clrcuniference, the 
name of the former company which carried 
on the iuanufact\u-e. and the places where It 
had biHMi carried on. thus: "Crockett Inter- 
national Leather ("lolh Company. Newark, N. 
.!.. U. S. A.; West Ham, Ksscx. England." 
Within the circle were, Ilrst, the figure of an 
eagle. dls|ilayed, under the word "10.\celslor." 
and then certain annoiuicements In large 
type, as follows: "Crockett & Co. Tanned 
Ix-.ither Cloth; i)alent(Hl .lan'y 24, '58. .1. U. 
& C. P. Crockett. iMnMUfiicluicrs." The court 
held this label to 1)e p.nlly tnidi> murk and 



TKADKMAHKS, 



83 



partly advci-tisemcnt; and, as tlio elutli was 
not patented, and J. R. & C. P. Croekett were 
not the niannfactureis, the court was inclined 
to agree with flic lord chancellor that Uicse 
statements invalidated the label as a trade- 
mark; but Lords Cranworth and Kiiigsdown 
preferred to place their decision against the 
plaintiff on the fn-ound that the defendants' 
label did not infringe it. They pointed out 
dUToronces in figure, and showed that the an- 
nouuccmonts were different; and the defend- 
ants' announcement being "Leather cloth, 
manufactured by their manager, late with J. 
K. & C. P. Crockett & Co.," without any ref- 
erence to a patent, Lord Kingsdowu said: 
"The leather cloth, of which the man\itacture 
was first invented or inti'oduced into the 
country by the Crocketts, was not the subject 
of any patent. The defendants had the 
right to manufacture the same article, and to 
represent it as the same with the article 
manufactured by the Crocketts; and, If the 
article had acquired in the market the name 
of Crocketts' leather cloth, not as expressing 
the maker of the particular specimen, but as 
<lescribiug the nature of the article by whom- 
soever made, they had a right in that sense 
to manufacture Crocketts' leather cloth, and 
to sell it by that name. On the other hand, 
they had no right, directly or indirectly, to 
represent that the article which they sold 
was manufactured by the Crocketts or by 
any person to whom the Crocketts had as- 
signed their business or their rights. They 
had no right to do this, either by positive 
statement, or by adopting the trade-mark of 
Crockett & Co., or of the plaintiffs to whom 
the Crocketts had assigned it, or by using a 
trade-mark so nearly resembling that of the 
plaintiff as to be calculated to mislead incau- 
tious purchasers." 

It seems to me that the true doctrine could 
not be more happily expressed than is here 
done by Lord Kingsdown. There is nothing 
in the case, nor in the opinions of any of the 
judges, adverse to the claim of the complain- 
ant. 

There Is a case in the New York Reports 
(Solchow V. Baker, 93 N. Y. 50) which comes 
very near to that now under consideration. 
That was the case of "sliced animals," and 
other "sliced" objects, being a term used by 
the plaintiff as a trade-mark to designate cer- 
tain puzzles manufactured and sold by them, 
in which pictiu-es of animals, etc., on card- 
board, were sliced up in pieces, and the puz- 
zle was to put the pieces together and make 
the animal. The label "Sliced Animals," 
etc., was used by the plaintiffs on all boxes 
of these goods sold by them. The defend- 
ants infringed, and the question was wheth- 
er this Ivind of designation could avail as a 
trade-mark. Judge Eapallo, in delivering the 
opinion of the court, after reviewing many 
cases on the subject, concludes as follows: 
"Our conclusion is that where a manufac- 
turer has invented a new name, consisting 

OHIF.PEnS.PKOP. — 3 



either of a new word or a word or words in 
comnum use, which he has applied for the 
first time to his own manufacture, or to an 
article manufactm'ed by him, to distinguisli 
it from those manufactured and sold by oth- 
ers, and the name thus adopted is not generic 
or descriptive of the article, its qualities, in- 
gredients, or characteristics, but is arbitrary 
or fanciful, and is not used merely to den<]te 
grade or quality, he is entitled to be protect- 
ed in the use of that name, notwithstanding 
that it has become so generally known thai 
it has been adopted by the public as the ordi- 
nary appellation of the article." 

This case is so directly in point that it 
seems unnecessary to look further. I think 
it perfectly clear, as matter of law, that the 
complainant is entitled to the exclusive use 
of the word "celluloid" as a trade-mark. 

The only question remaining to be consid- 
ered, therefore, is whether the defendant, by 
the use of the word "cellonite," as a trade- 
mark, or impression upon its goods as a 
trade-mark, does or will infringe the trade- 
mark of the complainant. Is the word "cel- 
lonite" sufficiently like the word "celluloid," 
when stamped upon the manufactured arti- 
cles, to deceive incautious purchasers, and to 
lead them to suppose that they are purchas- 
ing the products of the same manufacturers as 
when they purchased articles marked "cellu- 
loid?" I ihink this question must be answered 
in the affirmative. I think that, under the cir- 
cumstances of the ease, the word "cellonite" is 
sutficiently like the word "celluloid" to pro- 
duce the mischief which is within the prov- 
ince of the law. I say, unde: the circumstan- 
ces of the case. By that X mean the previ- 
ous nomenclature applied to the articles as 
manufactured by different persons. The com- 
plainant has always stamped its goods with 
the word "celluloid." Other manufacturers 
have called the product as manufactured 
by them by names quite unlike this, as "pas- 
bosene," "lignoid," "chrolithion," etc.; so that 
a wide difference in designation and mark- 
ing has existed between the complainant's 
goods and those of all others. The adoption 
now of a word and mark so nearly like the 
complainant's as "cellonite" cannot fail, it 
seems to me, to mislead ordinary purchasers, 
and to deceive the public. 

The defendant, however, sets up two 
grounds of defense against the application 
for an injunction outside of the merits of the 
case: First, that the complainant has acqui- 
esced in the use of the word "celluloid" in the 
names of a great number of other companies, 
several of which are enumerated In the an- 
swer, such as the "Cellidoid Brush Com- 
pany," the "Celluloid Collar & Cuff Com- 
pany," and the like; and, by such acquies- 
cence, has lost any right to complain of such 
use by other companies. But it is obvious 
that such special names, indicating confine- 
ment to a particular branch of the ti'ade, are 
wholly unlike the complainant's general 



34 



TRELIMIXARY CONSIDER ATIOXS. 



name of "Celluloid Manufacturing Company." 
Besides this, it is altogether probable, as we 
gather from one of the affidavits, that these 
branch companies are mostly licensees of the 
complainant, and very properly use the word 
"celluloid" in their names. We think that 
this defense cannot justly prevail. 

The other is of somewhat the same charac- 
ter,— supposed laches and acquiescence on 
the part of the complainant, in allowing the 
defendants themselves, for three or four 
years prior to the suit, to use the word "cel- 
lonite," stamped on their articles of manu- 
facture, and in their business name. How 
the defendant could have done this before Its 
own existence is ditlicult to understand. But, 
suppose it is meant that it was done by the 
corporators and predecessors of the defend- 
ant, there is no proof that it ever came to 
the knowledge of the complainant; and the 
fact that the previous name used under the 
former corporate organization was tliat of the 
"Jierchants' Manufacturing Company" is suf- 
ficient to alford the complainant prima facie 
ground of excuse for not having leanied of 
the alleged use of the word "cellouite," if it 
ever was used. I do not think that either 
of those defenses can- avail the defendant. 
My conclusion is that the complainant, as 
the case now stands, is, in strictness, entitled 
to an injunction to restrain the dcloudant 
from using the name "Cellonite Manufactur- 
ing Company," or any other name substan- 
tially like that of the complainant; and from 



using the word "cellonite" as a trade-mark 
or otherwise, upon the goods which it may 
manufacture or sell, or any other word sub- 
stantially similar to the word "celluloid," the 
trade-mark of the complainant. 

But my groat reluctance to grant a pre- 
liminary injunction for suppressing the use 
of a business name, or of a ti'ade-mark, in 
i any case in which the matter in issue is a 
! subject for fair discussion, and admits of 
I some doubt in the consideration of its facts, 
I induces me to withhold the order for the 
I present, on condition that the defendant will 
I agree to be ready to submit the cause for 
i final hearing at the next stated term of the 
court, which commences on the fourth Tues- 
day of September. It is possible that addi- 
tional evidence, or a fuller verification of the 
allegations of the answer, may so modify the 
facts of the case presented for consideration 
as to lead to a ihange of views on the ques- 
tion of infringement, or of excuse therefor. 
At all events, it will be more satisfactory not 
to render judgment in the case until the de- 
fendant has been fully hoard, and when it 
would have a right of immediate appeal. 
Should the defendant not be ready for a hear- 
ing at the time indicated, the present motion 
may be renewed without additional argument, 
or the complainant may take such other course 
as it shall be advised. 

At the September term no further evidence 
was offered, and an order for injunction was 
granted without opposition. 



SALES. 



35 



MITCHELL V. GILE. 

(12 N. H. 390.) 

Superior Court of New Hampshire. Hillsboi^ 
ough. Uec. Term, 1841. 

Assumpsit by one Mitchell against one Gile, 
oue of the charges being for ten cords of 
wood sold and delivered. It appeared on the 
(rial that plaintiff had on his land a lot of 
st';\^oned \vood, of which defendant wished to 
borrow a portion in order to complete a boat 
load. Plaintiff gave him permission to take 
what he wanted for the purpose, and, as de- 
fendant proposed to cut some wood from his 
land near plaintiff's it was agreed that the lat- 
ter should have of it as much as defendant 
might taiie of plaintiff's wood. Defendant ac- 
cordingly took ten cords of plaintiff's wood, 
:md plaintiff afterwards demanded a like 
iiuantity of defendant, which, however, the 
latter neglected to deliver. Defendant object- 
ed that this evidence did not support the dec- 
laration, and that plaintiff should have declar- 
ed on the original contract. 

Bowman & Porter, for plaintiff. S. D. Bell, 
for defendant. 

GILCHRIST, J. There is a class of cases 
where it is unnecessary to declare upon the 
.special contract which the parties may have 
made. Where oue party agrees to do a cer- 
tain thing, and the other party agrees to pay 
a ;*uni of money, and the thing or duty is per- 
formed, but the other party refuses to pay the 
money, an action lies for the money, because 
a debt has accrued, and nothing remains to be 
doue but to pay it. ITjere seems to be no rea- 
son in such a case why a general count should 
not be sufficient for the recovery of the money 
due. The plaintiff's claim does not then sound 
in damages, but is for a definite sum. Such 
is the principle recognized in Bank of Colum- 
bia V. Patterson's Adm'r, 7 Cranch, 303; 'SVil- 
liams V. Sherman, 7 Wend. 109; Jewell v. 
Schroeppel, 4 Cow. 564; Bolton v. Dickinson, 
10 Mass. 287; Sheldon v. Cox, 3 Bam. & C. 
4i:o, and in the cases generally, whenever the 
point is adverted to. 

There is another class of cases, where the 
only remedy for the plaintiff is by an action 
on the special agreement, because it still re- 
mains open and unresoinded. In general, 
where goods ai'e sold to be paid for wholly or 
in part by other goods, or by the defendant's 
labor, or otherwise than in money, the action 
must be on the agreement, and for a breach 
of it, and not for goods sold and delivered. 
And this is especially the case unless there be 
a sum of money due the paintiff on the con- 
tract, and that part of it which is for some- 
thing else than money has been performed by 
the defendant, so that there is nothing to be 
tlone which can be the subject of future liti- 
gation. In such case perhaps the plaintiff" 
may declare that tbe defendant was indebted 
to him in a sum of money for goods sold and 
delivered to him In exchange. But in a case 



tried before Jlr. Justice Buller, where the dec- 
laration was for goods sold and delivered, and 
the contract proved was, that the goods should 
be paid for partly in money and partly in but- 
tons, the plaintiff was nonsuited, for not de- 
claring on the special agreement. Harris v. 
Fowie, cited in the case of Barbe v. Parker, 
1 H. Bl. 287. There is also an old case on 
this point in Palmer's Reports, 3G4, Brigs' 
Case, where one in possession of land prom- 
ised to make a lease of It, and took a tine for 
the lease, after which, and before the lease 
was made, he was evicted from the land. It 
was held that debt did not lie to recover the 
money paid for the fine; and the principle of 
the decision seems to have been, that the con- 
tract to make the lease being still subsisting, 
the plaintiff should have sued upon that con- 
tract. And the authorities are nearly uniform, 
that where goods are delivered on a special 
agreement, a mere fafiure to perform, by the 
defendant, does not rescind the agi'eement; 
but it is still executory and subsisting, and 
the remedy is by an action upon it. Raymond 
V. Bearuard, 12 Johns. 274; Jennings v. Camp, 
13 Johns. 94; Clark v. Smith, 14 Johns. 32t;: 
Robertson v. Lynch, 18 Johns. 451; Dubois 
v. Canal Co., 4 Wend. 289; Talver v. West, 
Holt, 178. And in Weston v. Downes, 1 
Doug. 23, the court expressly held, that if a 
contract be rescinded, an action for money had 
and received will lie for money paid under it; 
but if the contract be broken, this action will 
not lie, but an action for a breach of the con- 
tract must be brought. This principle is fully 
recognized in Towers v. Barrett, 1 Term K. 
133, and in Davis v. Street, 1 Car. & P. 18. 
Opposed to the general current both of the 
English and American authorities on this point, 
are the intimations and the reasoning of Mr. 
Justice Cowen, in the case of Clark v. Fair- 
field, 22 Wend. 522. He expresses the opin- 
ion that the cases will justify the position, 
that though the compensation for the goods, 
or other thing advanced, is to be rendered in 
services, or some other specific thing, if the 
party promising to render be in default, in- 
debitatus assumpsit will lie for the price of the 
thing advanced. He admits that this position 
goes beyond any direct adjudication in Eng- 
land, although he thinks it may be maintained 
by the principle of many cases there, and that 
it is just that in such a case a general count 
should be maintained. He cites, with appro- 
bation, the case of Way v. Wakefield, 7 Vt. 
223, 228. where Mr. Justice Collamer says, 
that "whenever there are goods sold, work 
doue, or money passed, whatever stipulations 
may have be4n made about the price, or mode, 
or time of payment, if the terms have trans- 
pired so that money has become due, the gen- 
eral count may be maintained." The action 
was for harness sold, to be paid for in lum- 
ber at a specified time. There being a de- 
fault in payment, the court allowed the gen- 
eral count for harness sold. Mr. Justice Cow- 
en admits that "the learned judge certainly 



86 



SALES. 



did not cite any direct authority for thus ap- 
plying the rule," and we are not aware that 
any authority exists for such an application 
of it. To the rule, as above stated, there 
may, perhaps, be no objection. The question 
in cases of such a character always is, wheth- 
er the money has become due; and if no more 
be meant than that a general count will lie, 
where a contract has been performed, and has 
resulted in an obligation to pay money, then 
we assent to the correctness of the position. 
Of the propriety of the application of the rule 
to the facts in the case of Way v. ^'akefield, 
we may be permitted, respectfully, to express 
a doubt. It is true that a general count may 
sometimes be maintained, where tlie goods 
were to be paid for by other goods. Of this 
character is the ease of Forsyth v. .Tcrvis, 1 
Staikie, 437. The plaintiff sold the defendant 
a gun for foity-Bve guineas, and agreed to 
take of the defendant a gun, in part payment, 
at the price of thirty guineas. Lord Ellen- 
borough held that as here was a sjile of goods. 
to be paid for in part by other goods at a 
stipulated price, upon tbe refus;il of the pur- 
chaser to pay for them in that mode, a con- 
tract resulted to pay for tliem in money, and 
that the forty-five guineas might be recoveretl 
under a count for goods sold. This case has 
evei-y characteristic of a sale. The plaintiff 
sold the gun for a spec'ifled i)rice; the defend- 
ant agreed to give, in part payment, another 
gun for a stipulated price, and was bomid ei- 
ther to deliver the gun or pay its price. .\s he 
refused to deliver the gun, a decision that he 
was indebted to the plaintilT for its price ac- 
cords with the general tone of the authorities. 
In relation to the case of Clark v. Fairchild, it 
Is al.so to be remarked, that in the sul)se<iuent 
case of Ladue v. Seymour. '_M Wend. GL', Mr. 
JiLstice Bronson says, that where there is a 
subsisting special contract between the par- 
ties in relation to the thing done, all the cases 
agree that the contract nuist control, and that 
the remedy Is. In general, upon that, nnd not 
ui>>n the comMii>n coimts In assmnpsll. 

But apart from authority, and from teclinlc- 
nl reasoning depending upun authority for 
much of It.s force. It Is proper that the form 
of the remedy should be adapte<i to the actual 
state of facts. In no otlii-r mode of declailiig 
can the proper rule of damages be applied, 
where tliere has been a brea<'h of a special 
contract. If goods arc sold and dellvereil, the 
price, or value, at Ihe time of the transaction, 
la the inenHure of damages, mdess Ihero be 
something showing a dilferent Intention by 
the parties. The i)laliitllT' l« eiilllled to the 
value of the goods he has parted with, at Ihe 
time, nnd to nothing more; nor can the de- 
fenilnnt bo coijipelled to pay more than the 
value at the time he received llieni. Both par- 
lies act with reference to Ihi- valiii- at Ihe Ihne 
of the tmnsiiellon. lint where a party ngiecs, 
but negleelH to di'llver goods at n Npeellled 
time, the daningce for the Don-fullllment of 
BUch an agreement arc to be calculated accord- 



ing to their value at the time they should 
have been delivered. If the articles have fall- 
en in price, the defendant will be entitled to 
the benefit of such a change in the market; if 
they had risen, the increase in value will be- 
long to tlie plaintiff. There is, therefore, a 
substantial reason why the rights of both par- 
ties can be better secured, by declaring spe- 
cially upon a breach for the non-fulfilment of 
a contract to deliver goods, than by declaring 
upon the general count; and this reason prob- 
ably has had its effect in causing the forms of 
the remedy to be kept distinct. I/eigh v. 
Patersou, S Taunt. 5-10; Gainsford v. Cannll, 
2 Barn. & C. G24; Shaw v. Nudd, S Pick. !>. 

If. where goods are sold to be paid for oth- 
erwise thau in money, and the vendee neglects 
to perform, an action must be brought on the 
special agreement, there is a still stronger rea- 
son for adopting the same form of the rem- 
edy where the goods are not sold, but ex- 
changed. In the former case, the goods are 
at least sold; and so far the evidence sup- 
ports the declaration. But the latter case has 
no feature in common with a contract, neces- 
sary to support a count for goods sold and 
delivered. Xow the traiisaction between tliose 
parties was, properly speaking, an agreement 
for an exchange of goods, and not for a sale. 
Blackstoue says (2 Comm. 44G), "If it be a 
commutation of goods for goods, it is more 
properly an exchange; if it be a transferring 
of goods for money, it is called a sale." Here 
the defendant agreed to deliver to the plaintiff 
as much wood as he received of him. This 
agreement the defendant failed to perform. 
There is. then, a breach of the special agree- 
ment, and there is nothing else. The injury 
sustained by the plaintilT is to be compensated 
by a recovery of damages for the breach. 
There is nothing in the case that shows a SJile 
of the wood by either party to the other; nor 
can tlie transaction he considered a sitle. with- 
out a disregard of all the authorities wliicli 
distinguish actions sounding In damages i'(U' a 
bieaeh of contracts, from actions to recover n 
definite sum as the purchase money for goods 
sold. 

Nor is the case altered by the fact that no 
suit could be maintained without a demand. 
The w<x)d was to be delivered to the pl.iinlllT 
at such time as he should desire v It. The 
plaintilT would have a right to the perform- 
ance of the agreement whenever he should no- 
tify the defendant that he deslrcfl the wood. 
There could be no breach of the agreement by 
the defeiidiiin tuitii after this notice; and a re- 
fustil to deliver \v;is a breach, for which an 
action Is malntainalile. That a demanil, in a 
given case. Is necessary before a suit can be 
malnlaliied on ii specljil conlract, by no means 
proves that the ileniand alters tlie form of thi' 
remedy to which the pliiinllfr Is entitled. II 
might as well bi' said, thai liec.'iiise an ;ielioti 
on a Kj)er'lnl oinlrinl could not be miilnliilncd 
until a given period had elapsed, therefore the 
Inpsc of time altered the renin of the remedy. 



NATUUE AND DISTINCTIONS. 



37 



Undoubtedly, a demand and refusal may, in 
some cases, have this effect, but tlie result 
does not necessarily follow because the de- 
luand must be made. 



The opinion of the court Is, that the plain- 
tiff has misconceived his remedy, and that thl3 
action cannot be maintained. 

riaintiS nonsuit. 



38 



SAXES. 



MAT.LORY V. WILLIS. 

(4 N. Y. 76.) 

Court of Appeals of New York. 1850. 

Replevin for seventy-five bnrrels of flour. 
The plaintiffs had contracted with the de- 
fendant, Christopher Willis, to deliver at the 
Hopeton Mills a quautitj- of good morchaut- 
able wheat to be niauufactuied into Horn' on 
the followins terms: For every four liiishols 
and til'toen pounds of wheat, Christopher Wil- 
lis was to deliver one hundred and niuety- 
srx poimds of supertiue tlour, packed in bar- 
rels to be furnished by the plaintiffs. Said 
Willis was to guarantee the inspection of the 
flour, and if scratched, to pay all losses sus- 
tained thercb.v. The plaintiffs were to have 
all the otTals, or feed, etc.; the said Willis 
to store the same imtil sold. The plaintiffs 
were to pay sixteen cents for each barrel so 
manufactured, and if they made one shilling 
net profit on every barrel, they were to pay 
said Willis two cents per barrel extra. 

The plaintiffs delivered thirty -two thou- 
sand live hundred and eifrhty-six bushels and 
four poinids of wheat at the Hopeton Mills, 
and received seven thousand six hundred 
and sixty-seven barrels and one hundred 
and lifly-six pounds of flour, pursuant to the 
asrcemeut. They brousrht this action of re- 
plevin against Christopher Willis and Charles 
P. Willis, to recover the sun'lus of seventy- 
five barrels still due under tlie contract. The 
defen<lai)t insisted that the tide to the wheat 
passed to Willis by force of the delivery un- 
der the contract, and that, thererore. the 
I)laintiffs could not recover the flour niaim- 
I'actured from the same wheat. Judgment 
was rendered in favor of the plaintiffs by 
Pratt. .1., and aflirmed by the general term. 
The defendants brought this appeal. 

J. S. Glover, for appellants. S. H. Wells, 
for respondents. 

IIIKLBUT. J. If the contract was one of 
bailment, and If by a proper construction of 
It the defendants were entitled to the surplus 
flour, I tliinlc the burden would have rested 
on them of showing that the article In (pies, 
floii was such sunilus, after the i)laluliffs 
had establlslieil that It was the produce of 
their wheat; .so that taking the most favor- 
able view for the defendants, there was no 
error In point of law In this bianeli of the 
decision at llie circuit, which would entitle 
them to <>xcep(, and the only nuestion fur our 
(leclslon Is, whether the contract and tlw de- 
livery under It nmoinited to n sale or a hail- 
UKTit of the wlii'.MtV 

The (lefend.'inlH refer us to that part of the 
contract wlilcli binds them to deliver a bjir- 
rel of siiperflni' (lour and to guarantee its In- 
spi'i'tlon. for I'very four and one-fourth bush- 
els of wheat, which It la allegc<l, If the pl.-iln- 
tlffs' construction Is to pn-vall. Is not only 
an unrraHMiiiihle and hard contract for the 
(lefcndanlH, but Is altogelher Incotislslent 



with the notion of a bailment; for it is ask- 
ed, if it were not a sale, why should the de- 
fendants guarantee that the flom- should bear 
inspection, or why shoidd they agree for a 
certain quantity of wheat to deliver a bar. 
rel of floiu-? It may be remarked in answer 
to this, that the defendants being experi- 
enced millers must be deemed to have con- 
tracted with a knowledge of the quantity 
of wheat required to yield a barrel of floiu" 
and as the plaintiffs were obliged by the con- 
tract to deliver good merchantable wheat, 
it seems but reasonable that the defendants 
should have been required so to manufactiue 
it, as that the flour would bear inspection; 
that these provisions must be viewed in the 
connection in which they stand, and receive 
a construction which shall make them har- 
monize with the whole expression of the 
contract between the parties; and that tak- 
ing the whole agreement into view, they 
seem to have been inserted at the sugges- 
tion of the plaintiffs, for the puipose. in 
part, at least, of causing a skillful and pru- 
dent mauufacture of the wheat into flour; 
and even if they were employed to define 
the quantity of flour to be returned, the.v 
woxUd not overl)ear the other provisions of 
the agreement, which import very clearly an 
tindcrstanding between the parties that the 
identical wheat which was delivered by the 
plaintiffs should be maimfactured into flour 
for their benefit; that they were to pay for 
the work a stipulated price in money, and 
to receive the manufacttuvd article, together 
with the olTals or feed, which should come 
from the wheat. The language of the agree- 
ment will hardly bear a different construc- 
tion. The plaintiffs by its terms were to de- 
liver wheat to be manufactured into flour, 
which Willis agreed to do— i. e., ho agreed to 
manufacture the wheat so to be delivered 
into flour. But this provision would be en- 
tirely out of place in an exchange of wheat 
for llotu*. The plaintiffs were to furnish the 
barrels in which it was to be packed; thus 
providing every material for the completion 
of the work, and leaving nothing for Willis 
to do Viut to perform the proper labor of a 
inanufacturcM'. The plaintiff's were moreover 
to have all I lie offals or feed, etc.; not such 
n quantity of offals as would proceed from 
like quantity of other wheat, but the offals 
or feed — I. e., such as should come of grind- 
ing the very wheat delivered to the miller, 
who was also to store the feed until the 
plaintiffs could sell It. And In case Willis 
performed on his part, I. e., in case he man- 
ufactured the wheat so delivi-red into flour, 
with the requisite skill and prudence, the 
plaintiffs were to pay him at tlie nite of six- 
teen cents, or In a certain contingency eight- 
een c<>nl8 per barrel, as a compensation for 
the labor of luanufaclure. Proper effect can- 
not bo given to these provisions of the agree- 
ment, without treating It as a contract by the 
defenil.'intH to manufacture the plainliIVs' 
wheat into flour, to deliver to them the spe- 



NATURE AND DISTINCTIONS. 



39 



cific proceeds, at least to the extent mention- 
ed in the contract, and to receive in satisfac- 
tion for the worlv tlie' stipidated price pei 
barrel. Oonti-acts of tliis sort, which havo 
received a different construction, will be 
found to. have differed very materially from 
the present in their terms, as will be seen by 
a brief reference to the leading cases. 

In Buffum v. Merry, 3 Masou. 478, Fed. 
Cas. No. 2,112, the plaintiff owned two thou- 
sand nine hundred pomids of cotton yarn, 
and agreed to let one Hutchinson take it at 
the price of sixty-five cents per pound, and 
he was to pay the plaiutiff the amount in 
plaids, at fifteen cents per yard. H. was to 
use the plaintiff's yarn in making the waii) 
of the plaids, and to use for filling other yarn 
of as good a quality. Under this contract 
the yarn was delivered to H., who failed 
without having manufactured it iuto plaids, 
and assigned it with other property for the 
benefit of his creditors. The question was 
whether the property in the yarn passed to 
H. by the delivery: and Story, J., said that 
it did; holding that It was not a contract 
whereby the specific yarn was to be manu- 
factm'ed into cloth, wholly for the plaintiff's 
account and at his expense, and nothing but 
his yarn was to be used for the purpose. 
That in such a case the property might not 
have changed; but here the cloth was to 
be made of other yarn as well as the plain- 
tiff's. The whole cloth when made was not 
to be delivered to him, but so much only as 
at fifteen cents per yard would pay for the 
plaintiff's yam at sixty-five cents per poimd. 
That this was a sale of the yarn at a speci- 
fied price, to be paid for in plaids at a sped 
fied price. See, also, Story, Bailm. § 283; 
Jones, Bailm. p. 102. 

In Ewing v. French. 1 Blackf. 3.53, the 
plaintiff delivered a quantity of wheat to the 
defendants, at their mill, to be exchanged 
for flour. The wheat was thrown by the de- 
fendants into their common stock, and the 
mill was subsequently destroyed by fire. The 
court held this to be a contract of exchange, 
or a sale of the wheat to be paid for in flour; 
that from the moment the defendants receiv- 
ed the wheat they became liable for the 
flour; that the wheat itself was not to be 
returned, nor the identical flour manufac- 
tured from it. And this was very well, for 
the contract was, by Its express terms, one 
of exchange. 

In Smith v. Clark, 21 Wend. 83, one Hub- 
bard owned a flouring-mill. and the plaintiffs 
agreed with him to deliver wheat at his mill, 
■and he agreed that for four bushels and fifty- 
five pounds of wheat which should be receiv- 
ed, he would deliver the plaintiffs one barrel 



of supei-flne flom-, warranted to boar inspec- 
tion. Here was nothing which imported a 
delivery of wheat for the purpose of being 
manufactured, nor any agreement to make it 
iuto flom- and to receive a compensation for 
so doing, at a certain price per barrel; and 
it is obvious that Hubbard might have deliv- 
ered any flour of the quaUty stipulated for, 
in satisfaction of the contract. Hence it was 
held that the delivei-y of the wheat under 
this agi'eement amounted to an exchange of 
the wheat for flour, and that Hubbard on re- 
ceiving the wheat became indebted to the 
plaintiffs. 

In Norton v. Woodruff, 2 N. Y. 153, the 
defendant agreed to "take" wheat and to 
"give" them one barrel of superfine flour for 
eveiT four bushels and thirty-six pounds of 
wheat; but here also there was the absence 
of a delivery for the purpose of being manu- 
factured; no compensation was agi-eed to be 
given to the miller for his work, there was 
nothing about oft'als, and nothing about the 
wheat owner's furnishing baiTels in which 
to pack the flour. On the contrary, the mil- 
ler in this case was to fiu-nish the barrels. 
This court gave proper effect to the language 
of this contract by holding, that the miller, 
by agreeing to take wheat and give floiu' in 
retmm, had bargained for an exchange of 
wheat for flour; that any flour of the quality 
described in the contract would have an- 
swered its requirements, and that the prop- 
erty of the wheat passed upon its delivery. 

But in the ease under review. Willis con- 
tracted to manufacture the wheat delivered, 
and to receive compensation for his labor. 
The flour, by which was intended the prod- 
uce of the manufacture, was to be delivered 
to the plaintifTs in their own barrels, and the 
offals were to be kept in store as their prop- 
erty. These features give a character to this 
contract so materially different from that 
which is borne by the agreements which have 
received a judicial construction in the cases 
referred to, that with the fullest concurrence 
in the justice of those decisions, it may be 
held that the defendants were bailees and 
not pm-chasers of the plaintiffs' wheat, and 
bound to restore its proceeds to them. I am, 
therefore, of opinion that the judgment ol 
the supreme court ought to be affirmed. 

JEWETT. .T., also delivered an opinion in 
favor of affirming the judgment. 

RUGGLES, GARDINER, PRATT, and 
TAYLOR, JJ., concurred. 

BRONSON, C. J., and HARRIS, J., dis- 
sented. 



40 



SALES. 



HARKXESS V. RUSSELL & CO. 

(7 Sup. Ct 51, 118 U. S. 663.) 

Supreme Court of the United States. Not. 8, 
1S8G. 

Appeal from the supreme court of the ter- 
ritory of Utah. 

The facts fully appear in the following 
statement by Mr. Justice BRADLEY: 

This was an appeal from the supreme 
court of Utah. The action was brought in 
the district court for Weber county, to re- 
cover the value of two sto.am-eugines and 
boilers, and a portable saw-mill connected 
with each engine. A jury being waived, the 
court found the fncts, and I'eudered judg- 
ment for the plaintiff. Uussell & Co. The 
plaintiff is an Ohio corporation, and by its 
agent in Idaho, on the second of October, 
1SS2. agreed with a partnership firm by the 
name of Phelan & Ferguson, residents of 
Idaho, to sell to thcni the said engines, boil- 
ers, and saw-mills for the price of !fi.9S8, 
nearly all of which was secured by certain 
promissory notes, which severally contained 
the terms of the agreement between the par- 
ties. One of the notes (the others being in 
the same form) ,was as follows, to- wit: 
"Salt Lake City, October 2, 1SS2. On or be- 
fore the first day of Jlay, 1SS3. for value re- 
ceived in one sixteen-horse portable engine, 
No. 1,020, and one portable sawmill. No. 
128, all complete, bought of L. I'.. .Mattison, 
agent of Russell & Co., we, or eitlior of us, 
promise to pay to the order of Russell & 
Co., Massillon, Ohio. ?,300, payable at Wells, 
Fargo & Co.'s bank. Salt Lake City, Utah 
Territory, with ten per cent, interest per an- 
num from October 1, 1882. until paid, and 
reasonable attorney's fees, or any costs that 
ma.v be paid or incurred In any action or pro- 
ceeding instituted for the collection of this 
note or enforcenicnt of this covenant. The 
express condition of this transaction is such 
that the inie, ownorslilp. or jxwsession of 
said engine and sawinlll does not ]);iss from 
the said Russell & Co. until this note an<l In- 
terest shall have been paid In full, and tlie 
said Russell & Co. or his agent has full i)i>w- 
er to declare this note due, and lake posses- 
sion of salt! engine and saw-mill when they 
maj' deem themselves Insecure even before 
the maturity of this note; and It Is furtlier 
agreed by the makers hereof that If said 
note Is not paid nt maturity, that the jntcrost 
shall bo two per cent, per nionlli from ma- 
turity hi'teof tin paid, both before and after 
Judgiiir-nt, If any shoulil be rcnilfi-cil. In 
case sntd «awinlll nntl engine shall be taken 
back. Il\iHsell »K: Co. may sell the same at 
public or priv.'ite sale wllhoul notice, or they 
may. wllhout sale, Indorse the true value of 
the property on tliN note, and we agree to 
p.iy on the note any balance duo thereon, 
after such Indorsement, ns damages and 
rental for said machinery. As to this debt 
we waive the right (o exempt, or claim as 
exempt, any property, real or personiil. we 



now own, or may hereafter acquire, by vir- 
tue of any homestead or exemption law. 
state or federal, now in force, or that here- 
after may be enacted. P. O., Oxford, Oneida 
County, Idaho territory. $300. Phelan & 
Ferguson." Some of the notes were given 
for the price of one of the engines with its 
accompanying boiler and mill, and the others 
for the price of the other. Some of the notes 
were paid; and the present suit was brought 
on those that were not paid. The property 
was delivered to Phelan & Ferguson on the 
execution of the notes, and subsequently 
they sold it to the defendant Harkuess, in 
part payment of a debt due from them to 
him and one Langsdorf. The defendant, at 
the time of the sale to him. knew that the 
purchase price of the property had not been 
paid to the plaintiff, and that the plaintilT 
claimed title thereto until such payment was 
made. The unpaid notes given for each en- 
gine and mill exceeded in amount the value 
of such engine and mill when the action was 
commenced. 

The territory of Idaho has a law relating 
to chattel mortgages [act of January 12, 
1875], requiring that every such mortgage 
shall set out cert:iin particulars as to par- 
ties, time, amount, etc., with an affidavit at- 
tached that it is bona fide, and made with- 
out any design to defraud and delay cred- 
itors; and requiring the mortgage and affi- 
davit to be recorded in the county where the 
mortgagor lives, and in that where the prop- 
erty is located; and it is declared that no 
chattel mortgage shall be valid (except as 
between the parties thereto) without com- 
pliance wllh these requisites, unless the 
mortgagee shall have actual possession of 
the property mortgaged. In the present case 
no affidavit was attached to the notes, nor 
were they recorded. 

The court found that it was the intention 
of Phelan & Ferguson and of Russell it 
Co. that the title to the said property should 
not pass from Itiissell & Co. until all the 
notes were paid. Upon those facts the court 
found, as conclusions of law, that the ti'ans- 
action between Phelan & Ferguson an<l Rus- 
sell & Co. was a conditional or executory 
sale, and not an absolute sale with a lien 
reserved, and that the title did not pass to 
Phelan & Ferguson, or from them to the de- 
fendjuit. and gave Judgnu^nt for the plain- 
tilT. The supreme court of the territory nf- 
flrined this Judgment. 7 Pac. 86."). This ap- 
peal was taken from that Judgment. 

Parley I-. Williams, (James N. Kimball and 
Abbot R. Ileywood, on the brief.) for appel- 
lant. Charles W. liennett, for appellee. 

Mr. Justice RRAPLEY, after stating the 
facts as above reported, delivered the opin- 
ion of the court. 

The (Irst question to be considered Is 
whether the Iransacllon In question was a 
conditional sale or a mortgage; that Is, 



NATURE AND DISTINCTIONS. 



41 



wlictlior it was a more agreoinont to sell up- 
"u a condition to be performed, or an abso- 
lute sale, with a reservation of a lien or 
mortgage to secure the purchase money. If 
it WHS the latler, it is conceded that the lien 
or mortgage was void as against third per- 
sons, because not verified by affidavit, and 
not recorded as required by the law of Ida- 
ho. But, so far as words and the express in- 
tent of the parties can go, it is perfectly evi- 
dent that it was not an absolute sale, but 
only an agreement to sell upon condition 
that the purchasers should pay their notes 
at maturity. The language is: "The express 
condition of this transaction is such that the 
title * * * does not pass * * * until 
this note and interest shall have been paid 
in full." If the vendees should fail in this, 
or if the vendors should deem themselves in- 
secure before the maturity of the notes, the 
latter were authorized to repossess them- 
selves of the machinery, and credit the then 
value of it, or the proceeds of it if they 
should sell it, upon the unpaid notes. If 
this did not pay the notes, the balance was. 
still to be paid by the makers by way of 
"damages and rental for said macliinery." 
This stipulation was strictly in accordance 
with the rule of damages in such cases. Up- 
on an agreement to sell, if the purchaser 
fails to execute his contract, the true meas- 
ure of damages for its breach is the differ- 
ence between the price of the goods agreed 
on and their value at the time of the breach 
or trial, which may fairly be stipulated to 
be the price they bring on a resnlo. It can- 
not be said, therefore, that the stipulations 
of the contract were inconsistent with or re- 
pugnant to what the parties declared their 
intention to be, namely, to make an ex- 
ecutory and conditional contract of sale. 
Such contracts are well known In the law 
and often recognized; and, when free from 
any fraudulent intent, are not repugnant to 
.Tuy principle of justice or equity, even 
thnugli possession of the property be given 
to the proposed purchaser. The rule is for- 
mulated in the text-books and in many ad- 
.iudged cases. 

In Lord Blackburn's Treatise on the Con- 
tnict of Sale, published 40 years ago, two 
rules are laid. down as established. (1) That 
where, by the agreement, the vendor is to do 
anything to the goods before delivery, it is a 
condition precedent to the vesting of the 
property; (2) that where anytliing remains 
to be done to the goods for ascertaining the 
price, such as weighing, testing, etc., this is 
a condition precedent to the transfer of the 
property. Blackb. Sales, 152. And it is sub- 
sequently added that "the parties may indi- 
cate an intention, by their agreement, to 
make any condition precedent to the vesting 
of the property; and. If they do so, their in- 
tention is fulfilled." Blackb. Sales, 167. 

Mr. Beniamin, in his Treatise on Sales of 
Personal Property, adds to the two formu- 
lated rules of Lord Blackburn a third rule, 



which is supported by many authorities, to- 
wit: (3) "Where the buyer is by the con- 
tract bound to do anything as a condition, 
either precedent or concurrent, on which the 
passing of the property depends, the prop- 
erty will not pass until the condition be ful- 
filled, even though the goods may have been 
actually delivered into the possession of the 
buyer." Benj. Sales (2d Ed.) 236; Id. (3d 
Ed.) § 320. The author cites for this propo- 
sition Bishop V. Stillito, 2 Barn. & Aid. 329, 
note a; Brandt v. Bowlby, 2 Barn. & Adol. 
932; Barrow v. Coles (Lord Ellenborough) 3 
Camp. 92; Swain v. Sliepherd (Baron 
Parke) 1 Sloody & R. 223; Mires v. Solebay, 
2 Mod. 243. 

In the last case, decided in the time of 
Charles II., one Alston took sheep to pas- 
ture for a certain time, with an agreement 
that if, at the end of that time, he should 
13ay the owner a certain sum, he should have 
tlie sheep. Before tlie time expired the own- 
er sold them to another person; and it was 
held that the sale was valid, and that the 
agreement to sell the sheep to Alston, if he 
would pay for them at a certain day, did not 
amount to a sale, but only to an agreement. 
The other cases were instances of sales of 
goods to be paid for in cash or securities on 
delivery. It was held that the sales were 
conditional only, and that the vendors were 
entitled to retake the goods, even after de- 
livery, if the condition was not performed; 
the delivery being considered as conditional. 
This often happens in cases of sales by auc- 
tion, when certain terms of payment are pre- 
scribed, with a condition that, if they are 
not complied with, the goods may be resold 
for account of the buyer, who is to account 
for any deficiency between the second sale 
and the first. Such was the case of Lamond 
V. Duvall, 9 Q. B. 1030; and many more 
cases could be cited. 

In Ex parte Crawcour, L. R. 9 Ch. Div. 
419, certain furniture dealers let Robertson 
have a lot of furniture upon his paying £10, 
In cash and signing an agreement to pay £5 
per month (for which notes were given) un- 
til the whole price of the furniture should be 
paid; and when all the installments were 
paid, and not before, the furniture was to be 
the propert.v of Robertson; but, if he failed 
to pay any of the installments, the owners 
were authorized to take possession of the 
property, and all prior payments actually 
made were to be forfeited. The court of ap- 
peals held that the property did not pass by 
this agreement, and could not be taken as 
Robertson's property by his trustee under a 
liquidation proceeding. The same conclu- 
sion was reached in the stibsequent case of 
Crawcour v. Salter, L. R. 18 Ch. Div. 30. 

In these cases, it is true, support of the 
transaction was sought from a custom 
which prevails in the places where the trans- 
actions took place, of hotel-keepers holding 
their furniture on hire. But they show that 
the intent of the parties will be recognized 



4J 



SALES. 



and sanctioned where it is not contrary to 
the policy of the law. This policy, in Eng- 
land, is declared by statute. It has long 
been a provision of the English bankrupt 
laws, beginning with 21 Jae I. c. 19, that if 
any person becoming bankrupt has in his 
possession, order, or disposition, by consent 
of the owner, any goods or chattels of which 
he is the reputed owner, or takes upon him- 
self the sale, alteration, or disposition there- 
of as owner, such goods are to be sold for 
the benefit of his creditors. This law has 
had the effect of preventing or defeating con- 
ditional sales accompanied by voluntary de- 
livery of possession, except in cases like 
those before referred to; so that very few 
decisions are to be found in the English 
books directly in point on the question under 
consideration. The following case presents 
a fair illustration of the English law as 
based upon the statutes of bankruptcy. In 
Horn V. Baker, 9 East, 215, the owner of a 
term in a distillery, and of the apparatus 
and utensils emploj-ed therein, demised the 
same to J. & S. in consideration of an an- 
nuity to be paid to the owner and his wife 
during their several lives, and upon their 
death the lessees to have the liberty of 
purcliasiug the residue of the term, and the 
apparatus and utensils, with a proviso for 
re-entry if the annuity should at any time be 
two mouths in arrear. The annuity having 
become in arrear for that period, instead of 
making entry for condition broken, the wife 
and administrator of the owner brought suit 
to recover the anours, which was stopped 
by the bankruptcy of J. & S. The question 
then arose whether the utensils passed to 
the assignees of J. & S. under the baulirupt 
act, as being in their possession, order, and 
disposition as reputed owuei's; and the court 
held that they did; but that, if there had 
been a ui?age in the trade of letting utensils 
with a distillery, the case would have admit- 
ted a different consideration, since such a 
custom might have rebutted tlie presumption 
of ownership arising from the possession 
and apparent order and disposition of the 
goods. Tills case was followed in llolroyd 
V. Gwynne, 2 Taunt. 1711. 

This presumption of property In a I)Mnk- 
nipt arising from his possession and repiitod 
ownership becaiue so deeply imbcdilcd in the 
English law th.-it in process of time many per- 
sons In the profeshilon, not adverting to its 
origin in the st.atute of bankruptcy, were led 
to regard It as a doctrine of the CDininon law; 
and hence In srunc Htates In this country. 
whore no such slalnto e.xists, the priniiples of 
the staltito have lieon followed, and condi- 
tional sali'S of the Kind now under considera- 
tion hnvc been ccindemned either as being 
fraudulent and void as against enMlilors, or iia 
nmoiinliiig. In elTect, to alisulule sales with o 
reserved lien or mortgnge to secure the pay- 
ment of the piiieliMse uKiiiey. This view in 
li.nsed on the notion iluil sueli wiles are not al- 
lowed by law, and that the intent of the piir- 



, ties, however honestly formed, cannot legally 
be carried out. The insufficiency of this argu- 
' menf is demonstrated by the fact that condi- 
! tional sales are admissible in several acknowl- 
edged cases, and therefore there cannot be 
any rule of law against them as such. They 
may sometimes be used as a cover for fraud; 
I and, when this is charged, all the circum- 
I stances of the case, this included, will be 
1 open for the consideration of a jury. Where 
no fraud is intended, but the honest purpose 
of the iMrties is that the vcudee shall not 
have the ownership of the goods until he has 
paid for them, there is no general principle of 
law to prevent their purpose from having 
effect. 
In this country, in states where no such 
; statute as the English act referred to Is in 
force, many decisions have been rendered sus- 
taining conditional sales accompanied by deliv- 
ery of possession, both as between the parties 
themselves and as to third persons. 

In Ilussey v. Thornton, 4 JIass. 40t (decided 
in ISOS). where goods were delivered on board 
of a vessel for the vendee upon an agreement 
for a sale, subject to the condition that the 
goods sliould remain the property of the ven- 
dors until they received security for payment, 
it was held (Chief .Tuslico I'arsons delivering 
the opinion) that the property did not pass, 
and that the goods could not be attached by 
the creditors of the vendee. 

This case was followed in 1822 by that of 

Marston v. Baldwin, 17 Mass. 600, which 

was replevin against a sheriff for taking goods 

: which the plaintiff had agreed to soli to one 

Holt, the defendant iu the attachment; but 

by the agreement tlie prcipcrty was not to 

vest in Holt until, he should pay $100 (part of 

the iirice) which condition was not performed, 

tliough the goods were delivered. Holt had 

paid ^7o, which the plaintiff did not tender 

back. The court held that it was sufficient 

, for the plaintiff to be ready to repay the 

1 money when he should be requested, and a 

verdict for the plaintiff was sustained. 
I In Barrett v. I'lltchard, 2 Pick. 512, the 
court said: "It is Impossilile to raise a doubt 
as to the Intention of the parties in tills case, 
for it is expressly stipulated that "the wool, 
before manufaettu'ed, after being manufac- 
tured, or In any stage of manufacturing, shall 
be the projierty of the plaintiff until the price 
be paid.' It Is dilllcult to Imagine any good 
reason why this agreement should not bind 
the parties. • » • 'phe case from Taun- 
ton (llolroyd V. Gwynne) was a case of a con- 
ditional sale; but the condition was void as 
agiilnst the poliey of the statute 21 .Tac. I. c. 
IS), § 11. It would nut have changed the de- 
cision In that ca.se If there had been no sale; 
for, by that sl.'itule. If the true owner of 
goods and chjillels suiters another to exercise 
such control and miinagemeiit over them as 
to give hliu tlie appenrance of being the real 
owner, and he becomes li.'inl;r\ii)l, Ihe goods 
and ih.'illels shall be trealed ;in his property, 
and shidl be assigned by the commissioners 



NATURE AND DISTINCTIONS. 



43 



for the benefit of liis cierlitors. The case of 
Horn V. Bilker, 9 East. i;i5, also turned on 
the same point, and nothing in either of tlu'se 
eases has any bearing on the present (lucs- 
tion." 

In Coggill V. Hartford & N. H. R. Co., :{ 
CJra.v, .545, the rights of a bona fide purcliaser 
from one in possession under a conditional 
sale of goods were specificall.y discussed, and 
tlie court held, in an able opinion delivered by 
Mr. Justice Bigelow, that a sale and delivery 
of goods on condition that the title shall not 
vest in the vendee until payment of the price 
passes no title until the condition is perform- 
ed, and the vendor, if guilty of no laches, may 
reclaim the jiroperty, even from one who 
has piu'chiised from his vendee in good faith, 
and without notice. The learned .iustice com- 
menced his opinion in the following terms: 
"It has long been the settled rule of law in 
this commonwealth that a sale and delivery 
of goods on condition that the property is not 
to vest until the purchase money is paid or 
secured, does not pa.ss the title to the vendee. 
and that the vendor, in case the condition is 
not fulfilled, has a right to repossess him- 
self of the goods, both against the vendee and 
against his creditors claiming to hold tnem 
under attachments." He then addresses him- 
self to a consideration of the rights of a bona 
fide purchaser from the vendee, purchasing 
without notice of the condition on which the 
latter holds the goods in his possession; and 
he concludes that they are no greater than 
those of a creditor. He says: "All the cases 
turn on the principle that the compliance with 
the conditions of sale and delivery is, by the 
terms of the contract, precedent to the trans- 
fer of the property from the vendor to the 
vendee. The vendee in such cases acquires 
no property in the goods. He is only a bailee 
for a specific piu-pose. The delivery which in 
ordinary cases passes the title to the vendee 
mugt take effect according to the agreement 
of the parties, and can operate to vest the 
property only when the contingency contem- 
plated by the contract arises. The vendee, 
therefore, in such cases, having no title to 
the property, can pass none to others. He 
has only a bare right of iwssession. and those 
who claim under him, either as creditors or 
purchasers, can acquire no higher or better 
title. Such is the necessary result of carry- 
ing into effect the intention of the parties to 
a conditional sale and delivery. Any other 
rule would be equivalent to the denial of the 
validity of such contracts. But they certainly 
violate no rule of law, nor are they contrary 
to sound policy." 

This case was followed in Sargent v. Jlet- 
caif, 5 Gray, oOG; Deshon v. Bigelow. 8 Gray, 
159; Whitney v. Eaton, 15 Gray, 225; Hir- 
schorn v. Canney, 98 Mass. 149; and Chase 
v. ingalls, 122 Mass. 381; and is believed to 
express the settled law of Massachusetts. 

The same doctrine prevails in Connecticut, 
and was sustained in an able and learned opin- 
ion of Chief .Justice Williams, in the ease of 



Forbes v. Marsh, 15 Conn. 384 (decided in 
lS4oj, in w'hicli the principal authorities are 
reviewed. The decision in this case was fol- 
lowed in the subsequent case of Hart v. Car- 
penter, 24 Conn. 427, where the question arose 
upon the claim of a bona fide purchaser. 

In New York the law is the same, at least 
so far as relates to the vendee in a conditional 
sale and to his creditors; though there has 
been some diversity of opinion in its application 
to bona fide purchasers from such vendee. 

As early as 1S22, in the case of Haggerty 
V. Palmer, G Johns. Ch. 437, where an auc- 
tioneer had delivered to the purchaser goods 
sold at auction, it being one of the conditions 
of sale that indorsed notes should be given in 
payment, which the purchaser failed to give, 
Chancellor Kent held that it was a condi- 
tional sale and delivery, and gave no title 
which the vendee could transfer to an as- 
signee for the benefit of creditors; and he said 
that the cases under the English bankrupt 
act did not apply here. The chancellor re- 
ma iked, however, that "if the goods had been 
fairly sold by P. [the conditional vendee], or 
if the proceeds had been actually appropriated 
by the assignees before notice of this suit 
and of the injunction, the remedy would have 
been gone." 

In Strong v. Taylor, 2 Hill, 32G, Nelson, 
C. J., pronomicing the opinion, it was held to 
be a conditional sale w-here the agreement 
was to sell a canal-boat for a certain sum, to 
be paid in freighting flour and wheat, as di- 
rected by the vendor, he to have half the 
freight until paid in full, with interest. Be- 
fore the money was all paid the boat was 
seized under an execution against the vendee; 
and, in a suit by the vendor against the sher- 
iff, a verdict was found for the plaintiff, un- 
der the instruction of the court, and was sus- 
tained in banc upon the authority of the 
Ma.sisachusetts case of Barrett v. Pritchard, 
2 I'ick. 512. 

In Herring v. Hoppock, 15 N. Y. 409, the 
same doctrine was followed. In that case 
there was an agreement in writing for the 
sale of an iron safe, which was delivered to 
the vendee, and a note at six mouths given 
therefor; but it was expressly understood 
that no title was to pass until the note was 
paid; and if not paid. Herring, the vendor, 
was authorized to retake the safe, and collect 
all reasonable charges for its use. The sher- 
iff levied on the safe as the propert.v of 
the vendee, with notice of the plaintiff's claim. 
The court of appeals held that the title did 
not pa.ss out of Herring. Paige, J., said: 
"Whenever there is a condition precedent at- 
tached to a contract of sale which is not waiv- 
ed by an absolute and unconditional delivery, 
no title passes to the vendee until he performs 
the condition or the seller waives it." Com- 
stock, J., said that, if the question were new, 
it might be more in accordance with the an- 
alogies of the law to regard the writing giv- 
en on the sale as a mere security for the debt 
in the nature of a personal mortgage; but he 



44 



SAl.ES. 



considered the law aa having been settled by 
the previous cases, and the court unanimously 
concurred in the decision. 

In the cases of Smith v. Lynes, a N. Y. 
41, and Wait v. Green, 35 Barb. .">S5, on ap- 
peal, 36 N. y. 556, it was held that a bona 
lide purchaser, without notice from a vendee 
who is in possession under a conditional sale, 
will be protected as against the original ven- 
dor. These cases were reviewed, and, we 
think, substantially overruled, in the subse- 
quent case of Ballard v. Burgett, 40 N. Y. 
314, in which separate elaborate opinions were 
delivered by .Tudges Grover and Lott This 
decision was concurred in by Chief Judge 
Hunt, and Judges Woodruff, Mason, and Dan- 
iels; Judges James and Murray dissenting. 
In that case Ballard agreed to sell to one 
France a yoke of oxen for a price agreed on, 
but the contract had the condition "that the 
oxen were to remain the property of Ballard 
until they should be iiaid for." The oxen were 
delivered to France, and he subsequently sold 
them to the defendant Burgett, who purchtised 
and received them without notice that the 
plaintiff had any claim to them. The court 
sustained Ballard's claim; and subsociuent 
cases in New York are in harmony witu this 
decision. See Cole v. Mann, 62 N. Y. 1; 
Bean v. Edge, 84 X. Y. 510. 

We do not perceive that the ease of Dows 
v. Kidder, 84 N. Y. 121, is adverse to the 
ruling in Ballard v. Burgelt. There, al- 
though the I'l.Tintifl's slipulated that the title 
to the corn should not pass until payment 
of the price (which was to be cash, the 
same day), yet they indorsed and delivered 
to the purchaser the evidence of title, name- 
ly, the weigher's return, to enable him to 
take out the bUl of lading in his own name, 
and use it in raising funds to pay the plain- 
tiff. The purchaser misappropriated the 
funds, and did not pay for the corn. Here 
the intent of both parlies was that the pur- 
chaser might dispose of the corn, and he 
was merely the trustee of the i)1alntlff. In- 
vested by him with the legal title. Of 
course, the Innocent party who pnrch.ascd 
the corn from the first purchasor was not 
bound by the equities between him and the 
plaint IIT." 

The later case of Parker v. Baxter, SO N. 
Y. ."iSli, was precisely similar to Dows v. 
Kidder; and the same principle was In- 
volved In Farwell v. Importers' & Traders' 
Bank, !Mi N. Y. 4,s;j, where the plalnlilT de- 
livered his own note to n broker to get It 
discounted, .•ind the l.-itter pledged It as col- 
lateral for a loan made to himself. The 
legal title paHsivI; and althoiigli. ;is biv 
tween the plain) III' and the broUer, the for- 
mer was the owner of the note and Its pro- 
coefls. yet that was an ei|ulty which was 
lint blndluK on the Innocent hcilder. 

The decisions In Maine, New Hampshire, 
and Vermont are understood to be siilislaii- 
tlally to the same clTect as those of Massa- 
cliiiMelfH and New York; lluingh by recent 



statutes in Maine and Vermont, as also in 
Iowa, where the same ruling prevailed, it is 
declared in effect that no agreements that 
personal property, bargained and delivered 
to another, shall remain the property of the 
vendor, shall be valid against third persons 
without notice. George v. Stubbs, 26 .Me. 
243; Sawyer v. Fisher, 32 Me. 28; Brown 
V. Haynes, 52 Me. 578; Boynton v. Libby, 
62 Me. 253; Rogers v. AVhitehouse, 71 Me. 
222; Sargent v. Gile, S X. H. 325; McFar- 
land V. Farmer, 42 N. H. 386; King v. 
Bates, 57 X. H. 446; Hefflin v. Bell, 30 Vt. 
134; Armington v. Houston, 38 Vt. 448; 
Fales V. lioberts, 38 Vt. 503; Duncans v. 
Stone, 45 Vt. 123; Moseley v. Shattuck, 43 
Iowa. 540; Thorpe v. Fowler, 57 Iowa, 541. 
11 X. W. 3. 

The same view of the law has been taken 
in several other states. In Xew Jersey, in 
the case of Cole v. Berry, 42 X. J. Law, 30S, 
it was held that a contract for the sale of a 
sewing-machine to be delivered and paid for 
by installments, and to remain the property 
of the vendor until paid for, was a condi- 
tional sale, and gave the vendee no title un- 
til the condition was performed; and the 
cases are very fully discussed and distin- 
guished. 

In Penn.sylvania the law is understood to 
be somewhat different. It is thus summar- 
ized by Judge Depue, in the opinion deliv- 
ered in Cole V. Berry, 42 N. J. Law, 314, 
where he says: "In Pennsylvania a distinc- 
tion is taken between delivery under a bail- 
ment, with an option in the bailee to pur- 
chase at a named price, and a delivery un- 
der a contract of sale containing a reserva- 
tion of title in the vendor until the contract 
price be paid; it being held that in the for- 
mer instance projierty does not pass as in 
favor of creditors and purchasers of the 
bailee, but that in the latter instance deliv- 
ery to the vendee subjects the property to 
execution at the suit of his creditors, and 
makes It transferable to bona fide pur- 
chasers. Chamberlain v. Smith, 44 Pa. St. 
431; Bose v. Story, 1 Pa. St. ino; Martin v. 
Mathiot, 14 Serg. & U. 214; Ilaak v. Lin- 
derman, 64 Pa. St. 400." But, as the learn- 
ed .indge adds: "This distinction Is discred- 
ited by the great weight of atithority. which 
jiuts ])ossesslon under a conditional con- 
tnict of sale and possession under a bail- 
ment on the same footing,— liable to be as- 
sailed by creditors and purchasers for actual 
fraud, but not fraudulent per se." 

In this connection, see the case of Cop- 
land v. Bosquet. 4 Wash. C. C. 5SH, Fed. 
Cas. No. 3.212, where Mr. Justice Washing- 
ton and Judge Peters (the former delivering 
the opinion of the court) sustained a condl- 
llon.'il sale and delivery against a i)ur<li;iser 
from the vendee, who claimed to be a bona 
tide purchaser wllliout notice. 

In Dlilo tho validity of conditional sales ac- 
compiinled by delivery of possession Is fully 
Hustalned. The latest reported cuse bronghl 



NATURE AND DISTINCTIONS. 



45 



to our attention is tliat of Call v. Seymour, 
40 Ohio St. G70, wliicli arose upon a written 
contract contained in several promissoi-j- 
notes given for installments of the purchase 
money of a machine, and resembling very 
much the contract in the case now under 
considefatiou. Following the note, and as 
a part of the same document, is this condi- 
tion: "The express conditions of the sale 
and purchase of the separator and horse- 
power for which this note is given, is such 
. that the title, ownership, or possession does 
not pass from the said Seymour, Sabiu & 
Co. until this note, witli interest, is paid in 
full. The said Seymour, Sabin & Co. have 
full power to declare this note due, and 
talie possession of said separator and horse- 
power, at any time they may deem this 
note insecure, even before the maturity of 
the note, and to sell the said machine at 
public or private sale, the proceeds to be ap- 
plied upon the unpaid balance of the pur- 
chase price." The machine was seized un- 
der an attachment issued against the ven- 
dee, and the action was brought by the ven- 
dor against the constable who served the 
attachment. The case was fully argued, 
and the authorities pro and eon duly consid- 
ered by the court, which sustained the con- 
dition expressed In the contract, and af- 
firmed the judgment for the plaintiff. See, 
also, Sanders v. Keber, 28 Ohio St. C30. 

The same law prevails in Indiana. Shire- 
man V. Jackson, 14 Ind. 459; Dunbar v. 
Rawles, 28 Ind. 225; Bradshaw v. War- 
ner, 54 Ind. 58; Hodson v. Waiiier, 60 
Ind. 214; McGirr v. Sell, Id. 249. The same 
in Michigan. Whitney v. McConnoll, 29 
Mich. 12; Smith v. Lozo, 42 Mich. G, 3 N. 
W. 227; Marquette Manuf'g Co. v. Jeffery, 
49 Mich. 283, 13 N. W. 592. The same in 
Missouri. Ridgeway v. Kennedy, 52 Mo. 
24; Wangler v. Franlslin, 70 Mo. G.j9; Sum- 
ner V. Cottey, 71 JIo. 121. The same in Al- 
abama. Fairbanlis v. Eurelia. 67 Ala. 109; 
Sumner v. Woods, Id. 139. The same in 
several other states. For a very elaborate 
collection of cases on the subject, see Mr. 
Bennett's note to Benj. Sales (4th Ed.) § 
320, pp. 329-33G; and Mr. Freeman's note 
to Kanaga v. Taylor, 70 Am. Dec. 62, 7 Ohio 
St. 134. It is unnecessary to quote further 
from the decisions. The quotations al- 
ready made show the grounds and reasons 
of the rule. 

The law has been held differently in Illi- 
nois, and very nearly in conformity with 
the English decisions under the operation 
of the banlirupt law. The doctrine of the 
supreme court of that state is that if a per- 
son agrees to sell to another a chattel on 
condition that the price shall be paid within 
a certain time, retaining the title in himself 
in the mean time, and delivers the chattel 
to the vendee so as to clothe him with the 
apparent ownership, a bona tide purcluiser, 
or an execution creditor of the latter, is en- 
titled to protection as against tlie claim of 



the original vendor. Brundage v. Camp, 
21 111. 330; McCormick v. Hadden, 37 111. 
370; Murch v. Wright, 46 111. 488; Michigan 
Cent. R. Co. v. Phillips, GO 111. 190; Lucas 
V. Campbell, 88 111. 447; Van Duzor v. Al- 
len, 90 111. 499. Perhaps the statute of Illi- 
nois on the subject of chattel mortgages has 
influenced some of these decisions. This 
statute declares that "no mortgage, trust 
deed, or other conveyance of personal proiJ- 
erty having the effect of a mortgage or lieu 
upon such property, is valid as against the 
rights and interests of any third person, un- 
less tlie possession thereof be delivered to 
and remain with the grantee, or the instru- 
ment provide that the possession of the 
property may remain with the grantor, and 
the instrument be acknowledged and re- 
corded." It has been supposed that this 
statute indicates a rule of public policy con- 
demning secret liens and reservations of 
title on the part of vendors, and making 
void all agreements for such liens or reser- 
vations unless registered in the manner re- 
quired for chattel mortgages. At all events, 
the doctrine above referred to has become 
a rule of property in Illinois, and we have 
felt bound to observe It as such. 

In the ease of Hervey v. Rhode Island 
Locomotive Works, 93 U. S. 6G4, where a 
Rhode Island company leased to certain 
Illinois railroad contractors a locomotive en- 
gine and tender at a certain rent, payable at 
stated times during the ensuing year, with 
an agreement that, if the rent was duly 
paid, the engine and tender should become 
the property of the lessees, and possession 
was delivered to them, this court, being sat- 
isfied that the transaction was a conditional 
sale, and that, by the law of Illinois, the 
reservation of title by the lessors was void 
as against third persons unless the agree- 
ment was recorded (which It was not in 
proper time), decided that a levy and sale of 
the property in Illinois, under a judgmenc 
against the lessees, were valid, and that the 
locomotive works could not reclaim it. Mr. 
Justice Davis, delivering the opinion of the 
court, said: "It was decided by this court 
in Green v. Van Buskirk, 5 Wall. 307, and 7 
Wall. 139, that the liability of property to 
be sold under legal process issuing from the 
courts of the state where it is situated, must 
be determined by the law there, rather than 
that of the jurisdiction where the owner 
lives. These decisions rest on the ground 
that every state has the right to reguliite 
the transfer of property within its limits. 
and that whoever sends property to it im- 
pliedly submits to the regulations concern- 
ing its transfer in force there, although a 
different rule of transfer prevails in the ju- 
risdiction where he resides. * • « The 
policy of the law in Illinois will not permit 
the owner of personal property to sell it, 
either absolutely or conditionally, and still 
contiuue in possession of it. Possession is 
one of the strongest evidences of title to 



16 



SALES. 



this class of property, and cannot be right- 
fully separated from the title, except in the 
manner pointed out by ilie statute. The 
courts of Illinois say that to suffer, without 
notice to the world, the real ownership to be 
in one person, and the ostensible ownership 
in another, gives a false credit to the latter, 
and in this way works an injury to third 
persons. Accordingly, the actual owner of 
personal property creating an interest in an- 
other to whom it is delivered, if desirous of 
preserving a lien on it, must comply with 
the provisions of the chattel mortgage act. 
Rev. St. 111. 1874, 711, 712." The Illinois 
cases are then referred to by the learned 
justice to show the precise condition of the 
law of that state on the subject under con- 
sideration. 

The case of Ilervey v. Rhode Island Ix)C0- 
niotive Worl<s is relied on by the aiipolhmts 
in the pre.sent case as a decision in their 
favor; but this is not a correct conelr.sion. 
for it is apparent that the only points de- 
cided in that case were — First, tliat it was 
to be governed by the law of Illinois, the 
place where the property was situated; sec- 
ondly, that by the law of Illinois tlie agree- 
ment for continuing the title of the property 
in the vendors after its delivery to the ven- 
dees, whereby the latter became the osten- 
sible owners, was void as against third per- 
sons. This is all that was decided, and it 
does not aid the appellants, unless they can 
show that the law as held in Illinois, con- 
trary to the great weight of authority in 
England and this country, is that which 
should govern the present case. Aivl this 
we think they cannot do. We do not mean 
to say that the Illinois doctrine is not sup- 
ported l)y some decisions in other states. 
There arc such decisions; but they are few 
in numl)er compared with those in wliich it 
Is held that conditional sales are valid and 
lawful as well against third persons as 
against the jKirtics to the contract. 

The api)ellants, liowever, rely with much 
coMlldence on the decision of this court In 
Heryford v. Davis. 102 U. S. 23ri, a case 
coming from Missouri, where tlie law al- 
lows and sustains condltioiuil sales. Hut 
we do not think that this case, any more 
than that of Ilervey v. Rhode Island l/oco- 
motlve Works, will be found to support 
their views. 'J'lie whole question In Hery- 
ford v. Davis was as to the const rur^t ion of 
the contr;ict. This was In the form of a 
lease, but It contained provisions so Ir- 
reconcilable with the Idea of Its being real- 
ly a lease, and so deinonstrjible that It was 
an absolute sale with a reservation of a 
mortgage lion, that the latter lntcr|iretallon 
was glviMi to It by the court. This Inter- 
pri'tallon rendered II obnoxious to the Htat- 
ule iif Missouri requiring mortgages of per- 
sonal property to be rciorded in order to be 
valid ns airalnsl third iiersoim. It was con- 
<'eded by the lourl. in the opinion delivered 
by Mr. ,IUHllce Strong, that If the ngrei-- 



ment had really amounted to a lease, with 
an agreement for a conditional sale, the 
claim of the vendors would have been valid. 
The first two or three sentences of the opin- 
ion furnish a key to the whole effect of the 
decision. Mr. Justice Strong says: "Tlie 
correct determination of this case depends 
altogether upon the construction that must 
be given to the contract between the .Tack- 
son & Shai-p Company and the railroad com- 
pany, against which the defendants below 
recovered their judgment and obtained tiieir 
execution. If that contract was a mere 
lease of the cars to the railroad company, or 
if it was only a conditional sale, which did 
not pass the ownership until the condition 
should be performed, the property was not 
subject to levy and sale under execution at 
tlie suit of the defendant against the com- 
pany. But if, on the other hand, the title 
passed by the contract, and what was re- 
served by the Jackson & Sharp Company 
was a lien or security for the payment of 
the price, or what is called sometimes a 
mortgage back to the vendors, the ears were 
subject to levy and sale as the property of 
the railroad company." The whole residue 
of the opinion is occupied with the discus- 
sion of the true construction of the con- 
tract; and, as we have stated, the conclu- 
sion was reached tliat it was not really a 
lease nor a conditional sale, but an absolute 
sale, with the reservation of a lien or se- 
curity for the payment of the price. This 
ended the case; for, thus interpreted, the 
instrument inured as a mortgage in favor of 
the vendors, and ouglit to Iiave been record- 
ed in order to protect them against third 
persons. 

But whatever tlie law may be with regard 
to a bona tide purchaser from the vendee in 
a conditional sale, there is a circumstance 
In the present case whicli makes it clear of 
all dilHculty. The appellant in the present 
case was not a bona fide purchaser without 
notice. The court below find that, at llie 
time of and prior to the sale, he knew the 
purclijise price of the propert.v had not been 
paid, and that Russell & Co. claimed title 
tliereto until such payment was made. Un- 
der such circumstances. It is almost the 
unauiiiious opinion of all the courts that he 
cannot hold the jiroijcrty as against the true 
owners; but as the rulings of this court 
have been, as we thiidv, somewhat misun- 
derstood, wo have thought it proper to ex- 
amine the subject with some care, and to 
state whiit we regard as the general rule 
of law where II Is not affected by local stat- 
utes or local decisions to the contrary. 

It Is onl.v necessary to add that there Is 
nothing either In the statute or adjudged 
law of Idaho to prevent. In this case, the oii- 
oration of the genei'al rule, which we consid- 
er to be eslablislicd liy overwhelming au- 
thority, nninely, that, In the ab.senco of 
fraud, an agrcenu'nt for a conditional sale Is 
g(K)d and valid as well against third persons 



NATURE AXU DISTINCTIONS. 



47 



;is Mj-'alnst the parties to the transaction; 
and the further rule, that a bailee of per- 
sonal property cannot convey the title, or 
subject it to execution for his own debts. 



until the condition on which the agreement 
to sell was made, has been performed. 

The judgment of the supreme court of the 
territory of Utah is affirmed. 



48 



SALES. 



WOOD v. BOYNTON et al. 

(25 N. W. Rep. 42, 64 Wis. 265.) 

Supreme Court of "Wisconsin. Oct. 13, 1S85. 

Appeal from circuit court, Milwaukee 
county. 

Johnson, Rietbrock & Halsey, for appel- 
lant. N. S. Murphey, for respondents. 

TAYLOR, J. Tliis action was brought in 
the circuit court for Milwaukee county to 
recover the possession of an uucut diaiuoud 
of the alleged value of $1,000. The case was 
ti-ied in the circuit court, and after hearing 
all the evidence in the case, the learned cir- 
cuit judge directed the jurj' to find a verdict 
for the defendants. The plaintiff excepted 
to such instruction, and, after a verdict was 
rendered for the defendants, moved for a 
new trial upon the minutes of the judge. 
The motion was den'.ed, and the plaintiff 
duly excepted, and after judgment was en- 
tered in favor of the defendants, appealed to 
this court. The defendants are partners in 
the jewelry business. On tlie trial it ap- 
peared that on and before the tweuty-eiglith 
of December, 18S:{, the plaiulilT was the own- 
er of and in the possession of a small stone 
of the nature and value of which she was 
ignorant; that on that day she sold it to one 
of tlie defendants for the sum of one dollar. 
Afterwards It was ascertained that the stone 
was a rough diamond, and of the value of 
aliout !i;7(X). After learning tliis fact the 
plaintiff tendered the defendants the one dol- 
lar, and ton cents as interest, and demanded 
a return of the stone to her. The defend- 
ants refused to deliver it, and therefore she 
commeiiced this action. 

Tlie plaintiff tcstilicd to the circumstances 
attending the sale of the stone to Mr. Samuel 
H. Boyiiloii, as follows: "The lirst time 
Hoynton .saw (hat stone he was talking about 
buying the topaz, or whatever it is. In Sep- 
tember or October. I went into his store to 
get a little pin mondrd. and I liad It In a 
small box,— llie pin.- a small eai-iiiig; * * • 
tills stone, and a broken slcove-bullon were 
in the box. Mr. Roynton turned to give mo 
a cliei'U for my pin. I thought I would ask 
him what the stone was. and I took It out 
of the bo.\ and asked him to j)li':ise tell iiie 
what that was. lie look It In Ills hand and 
Koomofl some time Inoking al ir. I told him 
I luid been told II was a lojiaz, and he .said 
It might be. He says, 'I would buy this; 
would you sell it?' I told him I did not 
know but what I woulil. What would It be 
worth'/ And ho said ho did not know; he 
would give nio n dollar and keep It ns .-i 
HiM-clnieii, and I told him I would not 
soil It; and It was cerlalnly pn^tty to look 
at. Ho iiskrd me where I found It, and I 
lolil lilin In l')iiL'li'. lie ii.x|«>il about how 
far out, and I said right In the village, niid 
I wont out. Aflorwnrds, and iibouf the 
twoiily-i'Ighlh of December, I neoiled money 



pretty badly, and thought every dollar would 
help, and I took it back to Mr. Boynton and 
told him I had brought back the topaz, and 
he says, 'Well, yes; what did I offer you for 
it?' and I says, "One dollar;' and he stepped 
to the change drawer and gave me the dol- 
lar, and I went out." In another part of her 
testimony she says: "Before I sold the stone 
I had no knowledge whatever that it was a 
diamond. I told him that I had been ad- 
vised that it was probably a topaz, and he 
said probably it was. The stone was about 
the size of a canaiy bird's egg, nearly the 
shape of an egg, — worn pointed at one end; 
it was nearly stiaw color,— a little darker.'' 
She also testified that before this action was 
commenced she tendered the defeudants 
?1.10, and demanded the return of the stone, 
which they refused. This is substantially 
all the evidence of what took place at and 
before the sale to the defendants, as testi- 
tied to by the plaintiff herself. She pro- 
duced no other witness on that point. 

The evidence on the part of the defendant 
is not veiy different from the version given 
by the plaintiff, and certainly is not more 
favorable to the plaintiff'. Mr. Samuel B. 
Boynton, the defemlant to whom the stone 
was sold, testified that at the time he bought 
this stone, he had never seen an uucut dia- 
mond; had seen cut diamonds, but they are 
quite different from the uucut ones; "he 
had no idea this was a diamond, and it never 
entered his brain at the lime." Considerable 
evidence was given as to what took place 
after the sale and purchase, but that evi- 
dence has very little if any bearing, upon 
tlie main point in the case. 

This evidence clearly shows that the plain- 
tiff' sold tliP stone in question to the defeud- 
ants, and delivered it to them in December, 
l.S^i, for a consideration of one dollar. The 
title to the stone passed by the sale and de- 
liveiy to the defendants. How has that title 
been divested and again vested in the iilain- 
tiff? The contention of the learned counsel 
for the appellant is tliat tlio title became 
vested in the plaintiff by tJie tender to the 
Boynlons of tlie purcliaso money with luter- 
esi, and a demand of a rot urn of the stone 
to her. Unless sucli tender and demand re- 
vosled the tide in the appellant, she cannot 
niainlaiii her action. The only queslion In 
\ the ca.se Is wliether there was anything In 
the sale wlilcli eiilitled tlie vendor (the ap- 
pellant) to reseind the sale and so revest the 
title In her. The only reasons we know of 
for rescinding a s;ilo and revesting the title 
In the vender so I hat he may maintain an 
action at law for the recovery of the posses- 
sion against his vendee are (1) that the ven- 
dee was gtillty of some fraud In iirocuriiig a 
sale to be made to him; ('J) (hat there was a 
nilslnke made by the vendor In delivering an 
article whii'li was not the .'irlicle sold.— a 
mislnke in f.Mct as to the Identity of the thing 
Hohl Willi 111!' thing il("llvpred iijion the sale. 
This Inst Is mil In reallly a reseisslou of the 



FORMATION OF THE CON TK ACT— ESSENTIALS. 



40 



sale niaflo, as tlie thing delivered was uot 
the thiuj; sold, and uo title ever passed to 
the vendee by such delivery. 

In this case, ujjon the plaintiff's own evi- 
dence, there can be no just ground for al- 
leging that she was induced to make the sale 
.she did by any fraud or unfair dealmgs on 
the part of Mr. Boynton. Both were en- 
tirely ignorant at the time of the character 
of the stone and of its intrinsic value. Mr. 
Boynton was not an expert in uncut dia- 
monds, and had made no examination of the 
stone, except to take it in his hand and look 
at it before he made the offer of one dollar, 
which was refused at the time, and after- 
\\ards accepted without any comment or 
further examination made by Mr. Boynton. 
The appellant had the stone in her posses- 
sion for a long time, and it appears from her 
own statement that she had made some in- 
quii-y as to its nature and qualities. If she 
chose to sell it without further investigation 
as to its intrinsic value to a person who was 
guilty of no fraud or unfairness which in- 
duced her to sell it for a small sum, she can- 
not repudiate the sale because it is after- 
wards ascertained that she made a bad bar- 
gain. Kennedy v. Panama, etc., Mail Co., 
L. R. 2 Q. B. 5S0. There is no pretense of 
any mistake as to the identity of the thing 
sold. It was produced by the plaintiff and 
exhibited to the vendee before the sale was 
made, and the thing sold was delivered to 
the vendee when the purchase price was 
paid. Kennedy v. Panama, etc.. Mail Co., 
supra, 587; Street v. Blay, 2 Barn. & Adol. 
456; Gompertz v. Bartlett, 2 El. & Bl. S49; 
Gurney v. Womersley, 4 El. & Bl. 133; Ship's 
Case, 2 De G., J. & S. 544. Suppose the ap- 
pellant had produced the stone, and said she 
had been told that it was a diamond, and 
she believed it was, but had no knowledge 
herself as to its character or value, and Jlr. 
Boynton had given her ?500 for it, could he 
have rescinded the sale if it had turned out 
to be a topaz or any other stone of very 
small value? Could Mr. Boynton have re- 
scinded the sale on the ground of mistake? 
Clearly not, nor could he rescind it on the 
ground that there had been a breach of 
warranty, because there was no warranty, 
nor could he rescind it on the ground of 
fraud, unless he could show that she falsely 
declared that she had been told it was a dia- 
mond, or, if she had been so told, still she 
knew it was not a diamond. See Street v. 
Blay, supra. 

GRIF. PERS. PROP. — 4 



It is urged, with a good deal of earnest- 
ness, on the itart of the counsel for the appel- 
lant that, because it has turned out that 
the stone was immen.sely more valuable than 
the parties at the time of the sale supposed 
it was, such fact alone is a ground for the 
rescission of the sale, and that fact was evi- 
dence of fraud on the part of the vendee. 
^V'hether inadequacy of price is to be re- 
ceived as evidence of fraud, even in a suit 
in equity to avoid a sale, depends upon the 
facts known to the parties at the time the 
sale is made. When this sale was made the 
value of the thing sold was open to the in- 
vestigation of both parties, neither knew its 
intrinsic value, and, so far as the evidence 
in this case shows, both supposed that the 
price paid was adequate. How can fraud be 
predicated upon such a sale, even though 
after-investigation showed that the intrinsic 
value of the thing sold was hundreds of 
times greater than the price paid? It cer- 
tainly shows no such fraud as would author- 
ize the vendor to rescind the contract and 
bring an action at law to recover the posses- 
sion of the thing sold. Whether that fact 
would have any influence in an action in 
equity to avoid the sale we need not consid- 
er. See Stettheimer v. Killip, 75 N. Y. 287; 
Etting V. Bank of U. S., 11 Wheat. 59. 

We can find nothing in the evidence from 
which it could be justly inferred that Mr. 
Boynton, at the time he offered the plaintiff 
one dollar for the stone, had any knowledge 
of the real value of the stone, or that he en- 
tertained even a belief that the stone was 
a diamond. It cannot, therefore, be said 
that thei'e was a suppression of knowledge 
on the part of the defendant as to the value 
of the stone which a court of equity might 
seize upon to avoid the sale. The following 
cases show that, in the absence of fraud or 
warranty, the value of the property sold, as 
compared with the price paid, is no ground 
for a rescission of a sale. Wheat v. Cross, 
31 Md. 99; Lambert v. Heath, 15 Mees. & W. 
487; Bi-j-ant v. Pember, 45 Vt. 487; Kuel- 
kamp V. Hidding, 31 Wis. 503-511. How- 
ever unfortunate the plaintiff may have been 
in selling this valuable stone for a mere 
nominal sum, she has failed entirely to make 
out a case either of fraud or mistake in the 
sale such as will entitle her to a rescission of 
such sale so as to recover the property sold 
in an action at law. 

The judgment of the circuit court is af- 
firmed. 



50 



SALES. 



SHERWOOD V. WALKER et al. 

(33 N. W. 919, 66 Mich. 568.) 

Supreme Court of Michigan. July 7, 1887. I 

Error to circuit court, Wayne county; Jen- I 
nison. Judge. 

C. J. Reilly. for plaintiff. Wm. AiUman, 
Jr., (D. C. Holbrook, of counsel,) for de- 
fendants and appellants. 

MORSE. J. Replevin for a cow. Suit 
commenced in justice's court; judgment for 
plaintiff; appealed to circuit court of Wayne 
county, and verdict and judgment for plain- 
tiff in that court. The defendants bring 
error, and set out 25 assignments of the 
same. 

The main controversy depends upon the 
construction of a contract for the sale of 
the cow. The plaintiff claims that the ti- 
tle passed, and bases his action upon such ; 
claim. The defendants contend that the con- 
tract was executory, and by its terms no I 
title to the animal was acquired by plain- 
tiff. The defendants reside at Detroit, but \ 
are in business at Walkerville. Ontario, and 
have a farm at Greenfield, in Wayne county, I 
upon which were some blooded cnttle sup- 
posed to he barren as breeders. The Walk- 
ers are importers and breeders of polled 
.Angus cattle. The plaint ilT is a l>anker liv- j 
Ing at Plymouth, in Wayne county. He call- I 
ed upon tlie defendants at Walkerville for j 
the purcliase of some of their stock, but ; 
found none there that suited hiiu. Meeting 
one of the defendants afterwards, he was 
Informed tliat they had a few head upon this 
GreiMiiiold farm. He was asked to go out 
and look at them, with the statement at 
the time lliat tliey were probaI)Iy liarren. 
and wimUl not breed. >rny 5. ISSd, jilaintlff 
went out to Greenfield, and saw the cattle. 
\ few days thereafter, he called upon one of 
the defendants with the view of purchasing 
a cow. known ns "Rose 2d of Aberlone." 
.\fter coiisidciiilile talk. It was agreed that 
defendnnls would telephone Sherwood at his 
home In I'lynioiith In reference to the price. 
The second morning after tills talk he was 
called up by telephone, and the terms of the 
sale were finally agreed tipon. He was to 
pny live and une-hnlf cents per pound, live 
weight, fifty pounds shrlnknge. He was 
imUed how he Intended to take the cow 
lionie. iind replied that be might ship her 
from King's cattle-yard. He requested de- 
fendnnls to confirm Die sale In writing, 
whiih they did by sending hini the following 
letter: "\Vnlker%llle, May 1.1. IKSfi. T. 0. 
Sherwood, President, etc.— Denr Sir: We 
eiinllrm snle to you of t'le cow Uose 2d of 
Aberlone, lot .""ifl of our I'atnlogue. at five 
and a linlf cents per pound, less fifty itounds 
HhrlnU. We Inclose herewith order on Mr. 
Graham for th" cow. You might leave 
clieck Willi him. or mail to ns here, as you 
pri'fer. Yours, truly. Illrnni Walker & 



Sons." The order upon Graham inclosed In 
the letter read as follows: "Walkerville, 
May 15, ISSG. George Graham: You will 
please deliver at King's cattle-yard to Mr. 
T. C. Sherwood, Plymouth, the cow Rose 
2d of Aberlone, lot 5(5 of our catalogue. 
Send halter with the cow, and have her 
weighed. Yours, truly, Hiram Walker & 
Sons." On the twenty-first of the same 
mouth the plaintiff went to defendants' 
farm at Greenfield, and presented the order 
and letter to Graham, who informed him 
that the defendants had instructed him not 
to deliver the cow. Soon after, the plain- 
tiff tendered to Hiram Walker, one of the 
defendants, $80, and demanded the cow. 
Walker refused to take the money or deliver 
the cow. The plaintiff then instituted this 
suit. After he had secured possession of 
the cow under the writ of replevin, the 
plaintiff caused her to be weighed by the 
constable who served the writ, at a place 
other than King's cattle-yard. She weighed 
1,420 pounds. 

When the plaintiff, upon the trial in the 
circuit court, had submitted his proofs show- 
ing the above transaction, defendants moved 
to strike out and exclude the testimony from 
the case, for the reason that it was irrelevant 
and did not tend to show that the title to 
the cow passed, and that it showed that the 
contract of sale was merely executory. The 
court refused the motion, and an exception 
was taken. The defendants then introduced 
evidence tending to show that at the time 
of the alleged sale it was believed by both 
the plaintiff and themselves that the cow 
was barren and would not breed: that she 
cost .$S50, and if not barren would be worth 
from $750 to $1,000: 11i:it after the date of 
the letter, and tlie order to Graliam. the de- 
fendants were informed by said (?raham 
that in his judgment the cow was with 
calf, and therefore they instructed him not 
to deliver her to plnintilT. and on the twen- 
tieth of May, ISSti. telcgrai)hed to the plain- 
tiff what Graham thought about the cow be- 
ing witli calf, and that consequently they 
could not sell her The cow had a calf in 
the month of October following. On the 
nineteenth of May. the plaintiff wrote Gra- 
ham as follows: "Plymo\ith, May li). 18S(>. 
Mr. George Graham. Greenfield— Dear Sir: 
I liave bought Uose or Lucy from Mr. Walk- 
er, and will be there for her Friday morning, 
nine or ten o'clock. Do not water her in the 
morning. Yours, etc., T. C. Sherwood." 
I'liilntlff explained the mention of the two 
cows In this letter by testifying that, when 
he wrote this letter, the ord("r and let- 
ter of defendants were at his house, and, 
writing In a hurry, and being uncertain as 
to the name of the cow, and not wishing his 
cow watered, he thought It would do no 
harm lo name them both, as his bill of sale 
would show which one he had purchased. 
PliilntllT niso t(>stlfied that he asked defend- 
anlH to give him a price on the balance of 



FORMATION OF THE CONTRACT— ESSENTIALS. 



51 



their herd at Greenfield, as a friend thousUt 
of buyiuK some, and rocoived a letter dated 
May 17, 1SS6, in which they named the price 
of five cattle, including Lucy, at $90, and 
Rose 2d at $80. When he received the let- 
ter he called defendants up by telephone, 
and asked them why they put Rose 2d in 
the list, as he had already purchased her. 
They replied that they knew he had, but 
thought it would make no difference if plain- 
tiff and his friend concluded to take the 
whole herd. 

The foregoing is the substance of all the 
testimony in the case. 

The circuit judge instructed the jury that 
if they believed the defendants, when they 
sent the order and letter to plaintiff, meant 
to. pass the title to the cow, and that the 
cow was intended to be delivered to plain- 
tiff, it did not matter whether the cow was 
weighed at any particular place, or by any 
particular person; and if the cow was weigh- 
ed afterwards, as Sherwood testified, such 
weighing would be a sufficient compliance 
with the order. If they believed that de- 
fendants intended to pass the title by the 
\\riting, it did not matter whether the cow 
was weighed before or after suit brought, 
and the plaintiff would be entitled to recov- 
er. The defendants submitted a number of 
requests which were refused. The sub- 
stance of them was that the cow was never 
delivered to plaintiff, and the title to her 
did not pass by the letter and order; and 
that under the contract, as evidenced by 
these writings, the title did not pass until 
the cow was weighed and her price there- 
by determined; and that, if the defendants 
only agreed to sell a cow that would not 
breed, then the barrenness of the cow was 
a condition precedent to passing title, and 
plaintiff cannot recover. The court also 
charged the jury that it was immaterial 
whether the cow was with calf or not. It 
will therefore be seen that the defendants 
claim that, as a matter of law, the title to 
this cow did not pass, and that the circuit 
judge erred in submitting the case to the 
jury, to be determined by them, upon the 
intent of the parties as to whether or not 
the title passed with the sending of the let- 
ter and order by the defendants to the plain- 
tiff. 

This question as to the passing of title is 
fraught with difficulties, and not always 
easy of solution. An examination of the 
multitude of cases bearing upon this subject, 
with their infinite variety of facts, and at 
least apparent conflict of law, ofttimes tends 
to confuse rather than to enlighten the mind 
of the inquirer. It is best, therefore, to con- 
sider always, in cases of this kind, the gen- 
eral principles of the law, and then apply 
them as best we may to the facts of the 
ease in hand. 

The cow being worth over $.50, the con- 
tract of sale, in order to be valid, must be 
one where the purchaser has received or ac- 



j cepted a part of the goods, or given some- 
1 thing in earnest, or in part payment, or 
[ where the seller has signed some note or 
I memorandum in writing. How. St. § 61S0. 
; Here there was no actual delivery, nor any- 
thing given in payment or in earnest, but 
there was a sufficient memorandum signed 
by the defendants to take the case out of 
the statute, if the matter contained in such 
memorandum is sufficient to constitute a 
completed sale. It is evident from the let- 
ter that the payment of the purchase price 
was not intended as a condition precedent 
to the passing of the title. Mr. Sherwood 
is given his choice to pay the money to 
Graham at King's cattle-yards, or to send 
check by mail. 

Nor can there be any trouble about the 
delivery. The order instructed Graham to 
deliver the cow, upon presentation of the 
order, at such cattle-yards. But the price 
of the cow was not determined upon to a 
certainty. Before this could be ascertained, 
from the terms of the contract, the cow had 
to be weighed; and, by the order inclosed 
with the letter, Graham was instructed to 
have her weighed. If the cow had been 
weighed, and this letter had stated, upon 
such weight, the express and exact price 
of the animal, there can be no doubt but 
the cow would have passed with the sending 
and receipt of the letter and order by the 
plaintiff. Payment was not to be a coneur- 
I rent act with the delivery, and therein this 
! case differs from Case v. Dewey, 55 Mich. 
j lie, 20 N. W. 817, and 21 N. W. 911. Also. 
j in that case, there was no written memo- 
i randum of the sale, and a delivery was nec- 
essary to ijass the title of the sheep; and 
I it was held that such delivery could only 
be made by a surrender of the possession to 
the vendee, and an acceptance by him. De- 
livery by an actual transfer of the property 
from the vendor to the vendee, in a case like 
the ijresent, where the article can easily be 
so transferred by a manual act, is usually 
the most significant fact in the transaction 
to show the intent of the parties to pass the 
title, but it never has been held conclusive. 
Neither the actual delivery, nor the absence 
of such delivery, will control the case, where 
the intent of the parties is clear and mani- 
fest that the matter of deliver.y was not a 
condition precedent to the passing of the 
title, or that the delivery did not cairy with 
it the absolute title. The title may pass, if 
the parties so agree, where the statute of 
frauds does not interpose without delivery, 
and property may be delivered with the un- 
derstanding that the title shall not pass 
until some condition is performed. 

And whether the parties intended the ti- 
tle should pass before deliveiy or not is 
generally a question of fact to be deter- 
mined by the jury. In the case at bar the 
question of the intent of the parties was 
suV)mitted to the jury. This submission was 
ri.uht, unless from the reading of the letter 



52 



SALES. 



and the order, and all the facts of the oral 
bargaining of the parties, it is perfectly 
clear, as a matter of law. that the intent of 
the parties was that the cow should be 
weighed, and the price thereby accurately 
determined, before she should become the 
propeity of the plaintiff. I do not think 
that the intent of the parties in this case is 
a matter of law, but one of fact. The 
weighing of the cow was not a matter that 
needed the presence or any act of the de- 
fendants, or any agent of theirs, to be well 
or accurately done. It could make no dif- 
ference where or when she was weighed, if 
the same was done upon correct scales, and 
by a competent person. There is no pre- 
tense but what her weight was fairly ascer- 
tained by the plaintiff. The cow was spe- 
ciQcally designated by this writing, and her 
delivery ordered, and it cannot be said, in my 
opinion, that the defendants intended that 
the weighing of the animal should be done 
before the delivery even, or the passing of 
the title, Tlie order to Graham is to deliver 
her, and then follows the instruction, not 
that he shall weigh her himself, or weigh 
her, or even have her weighed, before de- 
livery, but simply, "Send liiilter with the 
cow, and have her weighed." 

It is evident to my mind that they had 
perfect confidence in the integrity and re- 
sponsibility of the plaintiff, and that they 
considered the sale perfected and completed 
when they mailed the letter and order to 
plaintiff. They did not intend to place any 
conditions precedent in the way, either of 
payment of the price, or the weighing of 
the cow, before the passing of the title. 
Tliey cared not whether the money was paid 
to (iniliam, or sent to them afterwards, or 
whetlier the cow was weighed before or 
after slie passed into tlie actual manual 
grasp of the plaintiff. Tlie refusal to deliver 
the cow grew entirely out of the fact that, 
before the plaintiff culled upon Graham for 
her, they di.scovered she was not barren, and 
therefore of greater value tli.-m tliey had 
sold her for. 

The following cases In this court supi)ort 
the Instruction of the court below as to tlie 
Intent of the piirtles governing and con- 
trolling llie (iiiesllon of a completed sale, 
and the passing of tide: Llngham v, Kg- 
gleston, "7 Mich, .'!2I: WilkliiHon v. Holiday, 
D:1 Mlih. lisr,; Grant v. Xb-rcliant.s' & Manu- 
fa<-tnrers' Hank, :i."> Midi. .")U"; rarpenler v. 
Gralinm. 12 Mich. l!»l, :t N. W, 1)71; Brewer 
v. Salt Ass'n, 47 Mich. ,-.:tl. 11 N. \V. :!7ll; 
Whitcomb V. Whllney. 24 Mich. 48(1; Byles 
V. Coll.T. r,\ .Mlih. 1. lit N. W, .'•(V.; Scolten 
V. Sutler, 37 Mich. .V_'7, .VfJ; I»n<ey Lumber 
Co. V. Lnne, .".S .Mich. .VJO, 525, 25 N, \V, 
5IVS; ,Ienl<liiMon v, Monroe, (il Midi. l,".l, 2.S 
N, W, <»::!. 

It nppinrH from tlu> riTonl that both i>ar- 
ttoM HUppoNcd tills cow WHH barren and 
would not breed, mid she wiis stild by the 
pound for :in liiHlgnltliiint hiiiii as coiniinri'd 



with her real value if a breeder. She was 
evidently sold and purchased on the relation 
of her value for beef, unless the plaintiff 
had learned of her true condition, and con- 
cealed such knowledge from the defendants. 
Before the plaintiff secured possession of 
the animal, the defendants learned that she 
was with calf, and therefore of great value, 
and undertook to rescind the sale by re- 
fusing to deliver her. The question arises 
whether they had a right to do so. The 
circuit judge nded that this fact did not 
avoid tlie sale and it made no difference 
whether she was barren or not. I am of the 
opinion that the court erred in this holding. 
I know that this is a close question, and 
the dividing line between the adjudicated 
cases is not easily discerned. But it must 
be considered as well settled that a iiarty 
who has given an apparent consent to a con- 
tract of sale may refuse to execute it, or he 
ma.v avoid it after it has been completed, 
if Uie assent was founded, or the contract 
made, upon the mistake of a material fact, 
— such as the subject-matter of the sale, the 
price, or some collateral fact materiall.v in- 
ducing the agreement; and this can be done 
wlien the mistake is mutual, 1 Benj. Sales, 
§§ 605, (iOC; Leake, Cent. 339; Story, Sales, 
(4th Ed.) §§ 377, 14S. See, also, Cutts v. 
Guild, 57 N. Y, 229; Harvey v, Harris, 112 
Jlass. 32; Gardner v. I.jine, 9 Allen, 492, 12 
Allen, 44; Huthmachor v. Harris" Adin'i's, 
3S Pa, St, 491; Byers v. Chapin, 28 Ohio St. 
300; Gibson v, I'elkie, 37 Mich. 380, and 
cases cited; Allen v. Hammond, 11 Pet. 03- 
71. 

If there is a difference or misapprehension 
as to the substance of the thing bargainod 
for; if the thing actually delivered or re- 
ceived is diffeient in sulistance from the 
thing bargained for, and intended to he sold, 
—then there is no contract; but if it be only 
a dilTerence in some ipiality or accident, 
even though the mistake ma.v have been the 
actuating motive to the purchaser or seller, 
or both of them, yet the contract remains 
Iiiiiding. "The dilliculty in every case is to 
(leleniiine whether the mistake or misap- 
lirehension is as to the substance of the 
whole contract, going, as It were, to the root 
of the matter, or only to some point, even 
though a material point, an error as tn 
which does not, affect the substance of tlie 
whole consideration." Kennedy v. ranaiii:i. 
etc.. Mall Co., L. U. 2 Q. B. .580, ,587, It has 
been held. In accordance with the prlncliiles 
above stated, tlint where a horse Is bought 
under the bcllet' that he is sound, and bolli 
vendor and vendee honestly believe hliii to 
be sound, the imreliaser nuisl stand by his 
bargain, and pay the full price, unless there 
was u wnnanly. 

It HeeniH to me, however. In the case made 

by this r rd, thai the mistake or niisjiii- 

prehensloii of the parties went to the whole 
siibstani'e of the agreement. If the eow 
was II bleeder, she was worth at least !f7,">0; 



FOUMATION OF THE CONTRACT— ESSENTIALS. 



o 



3 



if larren, she was worth not over ?80. The 
parties would not have made the contract of 
sale except upon the understandiuj.' and be- 
lief that she was incapable of breeding, and 
of no use as a cow. It is true she is now 
the identical animal that they thought her 
to be when the contract was made; there is 
no mistake as to the identity of the creature. 
Yet the mistake was not of the mere quality 
of the animal, but went to *,he very nature 
of the thing. A barren cow is substantially 
a different creature than a breeding one. 
There is as much difference between them 
for all purposes of use as there is between 
an ox and a cow that is capable of breeding 
and giving milk. If the mutual mistake had 
simply related to the fact whether she was 
with calf or not for one season, then it might 
have been a good sale, but the mistake af- 
fected the character of the animal for all 
time, and for her present and ultimate use. 
She was not in fact the animal, or the kind 
of animal the defendants intended to sell or 
the plaintiff to buy. She was not a barren 
cow, and, if this fact had been known, there 
would have been no contract. The mistake 



affected the substance of the whole consid- 
eration, and it must be considei'ed that 
there was no contract to sell or sale of the 
cow as she actually was. The thing sold 
and bought had in fact no existence. She 
was sold as a beef creature would be sold; 
she is in fact a breeding cow, and a valua- 
ble one. The court should have instructed 
the jury that if they found that the cow 
was sold, or contracted to be sold, upon the 
understanding of both parties that she was 
ban-en, and useless for the purpose of 
breeding, and that in fact she was not bar- 
ren, but capable of breeding, then the de- 
fendants had a right to rescind, and to re- 
fuse to deliver, and the verdict should be in 
their favor. 

The judgment of the court below must be 
reversed, and a new trial granted, with costs 
of this court to defendants. 

CAMPBELL, C. J., and CHAMPLIN, J., 

concurred. 

SHERWOOD, J., delivered a dissenting 
opinion. 



54 



SALES. 



REDPATH et al. v. BROWN et al. 

(39 N. W. 51, 71 Mich. 258.) 

Supreme Court of Michigan. July 11, 18S8. 

Error to circuit court, Wayne county; Cor- 
nelius J. ReiUy, Judge. 

Replevin brought by Ellis W. Redpath, 
Leonidas H. Redpath, and Newtou H. Red- 
path against William Brown and Catherine 
M. Jones, to recover possession of certain 
merchandise, boots and shoes, sold by plain- 
tiffs to the tirm of Jones Bros, between Au- 
gust 31, ISSG, and Xoveniber 5, ISSli. The 
case in the court below, upon the part of the 
plaintiffs, was prosecuted upon the theoiy 
that they were entitled to recover on three 
distinct grounds: First, that they had been 
induced to sell the goods in question to Jones 
Bros, by reason of false representations made 
by Joues Bros, with reference to their finan- 
cial responsibility to commercial agencies, 
which representations had been communicat- 
ed to plaintitts with a view to enable them 
to purchase goods from plaintiffs on credit; 
second, that, at the time that they made the 
purchases of the goods in question, it was 
their intention not to pay for the same; third, 
that the 'fausfer of the possession and title 
of the goods in question, purchased by Jones 
Bros., was the consummation of a fraudu- 
lent scheme entered into at the time the goods 
were purchased, and effected by means of 
the assignment made to defendant Brown, 
and a chattel mortgage executed to defend- 
ant Jones. It appears that prior to March 
31, 188(i, the firm of Jones Bros, referred to 
were couductiug a small business on Jefl'er- 
son avenue, In the city of Detroit, and about 
that time decided to enlarge their business, 
and remove to a more commodious store on 
Michigan avenue. With such object and pur- 
pose lu view, one of the firm visited Boston 
for the purpose of purchasing goods upon 
credit; and wliile there made oue of the 
statements relied upon in this case to John 
W. Ilalght, an employ^ of the American Boot 
& .Slioe Reporting Company, as a basis for 
credit tliey Intended to ask of the subscrib- 
ers to such agency. The statement is. In sub- 
stance, as follows: Capital In business, ,f:!,- 
2fK): total Indelilednoss, less than ?100; rent, 
,$840; sales for the year ISK.'., ,'j;,''.,l()0; moved 
to this store Man'li. 188U; when spring goods 
are In, which we have bought, will make our 
stock about .fr.,(KK); and our IndcbliMlness. $1,- 
SfK). Do their own work. Moans ;ill in the 
business. This firm contlntied to do business 
until January 111, 1S.S7, when Ihey made an 
nssignnieiit for the bcnidt of (heir creditors 
to (lereniliint Brown. Previous to the execu- 
tion of this assignment, the tlrm executed to 
defendant Catherine M. Jones, who Is their 
sister, n chattel mortgngc for $'J,(MH) cover- 
ing their entire slock of l)o<ils and shoes. 
This clialtel mortgage purports to have been 
executed January (1, 1887, but was not tiled 
witli tlu? city clerk of the city of Detroit un- 
til January H), 1.H.H7, (he same day the as- 



sigumentwas executed. Credits for the goods 
sold were gianted on the strength of such 
statement, and one made February 4, 1SS4, 
to the National Shoe & Leather Exchange, 
which is, in substance, as follows: Capital, 
Januaiy 1, 1SS4, $2,250; stock insured for 
$1,500; outstandiug accounts, ?100; owe for 
goods, $171.14. Have no borrowed money; 
no chattel mortgages or judgments. Claim a 
business was done last year of ?5,069; that 
they are worth $2,200 above all Uabilities, 
It appeared, at the time they executed their 
assignment, January 19, 1S87, that their total 
assets were as follows: Stock, $5,345; fur- 
niture and fixtures, $225; findings, $20; book- 
accounts, $193.50; while their liabilities ag- 
gregated $7,430.03. During the interval be- 
tween March 31, 18S6. and January 19, 1SS7, 
the expeut,es of the firm's business were about 
$2,050.50; thus showing that there should 
have been on hand, January 19, 1887, of the 
original stock of ,$3,200, $1,200, in addition 
to all the stock they had acquired in the meas 
time. But. instead of there being a surplus 
over liabilities, there was a deficit of $2,000. 
The firm's books showed that, between the 
above dates, they bad purchased goods to the 
amount of $13,609.27, and had paid thereon 
$6,880.41; and they claimed to have borrowed 
$2,000 of a sister, which they had put into 
the business. This state of affairs would re- 
fjuire them to account for the following: 

Stock at time statement was made. . $ 3,200 00 

Stock purchased since then 13.669 37 

Cash borrowed 2,000 00 

$18,869 37 

Payments as above $6,886 41 

Expeusos ^,056 60 

8,942 91 

Which would leave goods on 
hand $ 9,926 46 

There was evidence also to show that at 
the time of making the statement, in March, 
1886. they owed their sister over $1,000. The 
chattel mortgage given by the firm to the 
defendant Catherine M. Jones was executed 
i;! days before the assignment, but was not 
filed until the day the assigmuent was made. 
It also ap)ieared that, after the assignment, 
the assignee went Into possession, retaining 
the Jones Bros., luul a clerk whom they had 
employed. No change was made lu the 
signs. The business was finally transferred 
to Calherlne M. Jones; she taking the stock 
lu payment of her chattel mortgage, and pay- 
ing the balance In cash, Jones Bros, acting 
as her agent In the transaction. On paying 
the rent, (he a.sslgnee had taken a receipt 
reserving 'he rights of the Jones Bros, to re- 
tain the store iniiler the lease. The assignee 
In Ills accomit stated thai he had cash on 
hand $8,S5.32, but In that account he credited 
himself with the sum of $1,960.38, paid on 
tho Catherine M. Jones mortgage; but the 
bill of sale of the stock showed that It was 
only $l,r)ir).('>,'t; and, as she was to pay $2. 
367.78 for the stock, It left a balance of 



FOIJMATIOX OF THE CONTUACT— ESSENTIALS. 



:>S22.15 reccivej from tliat source. The retail 
sales amounted to l^TOS.TS, making tlie total 
cash receipts .fl,610.90, while the total ex- 
penses were ¥291.83; showing $1,319.07, in- 
stead of $885.32, to be accounted for by the 
assignee. At the close of the testimony, the 
court took the case from the jui'y, and or- 
dered a judgment in money In favor of tlie 
defendants jointly. Plaintiffs bring error. 

Dickinson, Thm-ber & Hosmer and Elliott 
G. Stevenson, for appellants. E. T. Wood, 
for appellees. 

CAMPBELL, J. Plaintiffs sued in replevin 
to get back certain goods which they claimed 
had been obtained from them fraudulently by 
a firm doing business as Jones Bros. These 
goods vere sold at various times, upon the 
faith of representations of solvency; and 
plaintiffs claimed the facts showed that the 
purchasers had obtained the property with a 
purpose of cheating their creditors. Brown 
was the assignee of that firm, and Catherine 
M. Jones had purchased most of the assigned 
stock, paying for it partly by a chattel mort- 
gage, the good faith of which was attacked, 
and partly otherwise. The dealings of the 
defendants were claimed not to entitle them 
to stand in any better position than their 
vendors. Upon the trial the court let in proof 
of a series of representations of business con- 
dition which indicated solvency and healthy 
business, and further testimony claimed to 
show either that these representations were 
untrue, or else that goods had been disposed 
of in some fraudulent way, which it is in- 
sisted tended to the direction of a fraudulent 
scheme to get goods, and make away with 
them, without paying for them. It is claimed 
that the assignee's accounts show tampering 
with the assets, and that the chattel mort- 
gage was not in good faith. After receiving 
the testimony, the circuit judge niled that no 



fraud was made out, and took the case from 
the jury, and ordered a judgment in money in 
favor of defendants jointly. We do not see 
any foundation for such a joint money re- 
covery. Defendants had no joint interest in 
the property replevied, so far as the recoi'd 
shows. But we think the case should have 
gone to the jury on the facts. There was 
peitinent testimony upon the question of 
fraud. If the transactions involved the per- 
petration of continuous frauds on plaintiffs, 
they had a right, as against their vendees, to 
rescind, and an equal right as against other 
persons colluding with them to carry out their 
schemes. If there was any testimony tend- 
ing appreciably to show fraud, the weight of 
it was a question of fact for the jury. De- 
fendants introduced no testimony; and, had 
they done so, it would have required the same 
treatment. The question before us is not 
what we might ourselves have inferred from 
the facts in evidence. We have no means 
of knowing that these facts would have per- 
suaded the jm-y that any fraud was commit- 
ted, or that all the doubts, if any, might not 
be cleared up. For anything we; know, the 
fii-m may have given out for want of business 
capacity and experience. We do not propose 
to make any comments, or express any sus- 
picions. All that we do is to say that we 
think the case was a proper one for the jury 
to consider. It is not necessary, in order to 
prove fraudulent purchases, to show defend- 
ants' complicity in the original scheme. If 
there was a scheme. They may be unable to 
hold the goods without being guilty of actual 
dishonesty. Had they gone into proof, the 
verdict might have been favorable; but, 
without testimony on their side, we cannot 
say that the jury would have found against 
plaintiffs. The judgment must be reversed, 
with costs, and a new trial granted. 
The other justices concurred. 



56 



SALES. 



POLHILL y. WALTER. 

(3 Barn. & Adol. 122.) 

Court of King's Bench. Hilary Term, 1832. 

Declaration stated, in the first count, that 
J. B. Fox, at Pernambuco, according to the 
usage of merchants, drew a bill of excbause, 
dated the 23d of April, 1S29, upon Edward 
Ilancorne, requesting him, sixty days after 
sight thereof, to pay Messrs. Turner, Brade, 
and Co., or order, £140. 16s. Sd. value re- 
ceived, for Mr. Robert Lott; that afterwards 
the defendant, well knowing the premises, 
did falsely, fraudulently, and deceitfully rep- 
x-esent and pretend that he was duly author- 
ized by Hancorne to accept the said bill of 
exchange according to the usage of mer- 
chants, on behalf and by the procuration of 
Hancorne, to whom the same was directed 
as aforesaid, and did then and there falsely 
and fraudulently pretend to accept the same 
by the procuration of Hancorne; that the 
.said bill of exchange was indorsed over, and 
bj' various indorsements came to the plain- 
tiff, of which the defendant had notice; tliat 
the plaintiCl", relying upon the said pretend- 
ed acceptance, and believing that the de- 
fendant had authority from Hancorne so to 
accept the bill on his behalf, and in consid- 
eration thereof, and of the indorsement, and 
of the delivery of the bill to him the plain- 
tilT, received and took from tlie last iudors- 
ers the bill as and for payment of the sum 
of money in the bill specilied, for certain 
goods and merchandizes of the plaintiff sold 
to the indorsers; that when the bill became 
due, it was presented to Hancorne for pay- 
ment, but that he, Hancorne, did not nor 
would pay the same, whereupon the plain- 
tiff brought an action against Hancorne as 
the supposed acceptor thereof; and that by 
reason of the premises, and the said false 
rejiresentation and pretence of the defend- 
ant, the plaintiff not only lost the sum of 
money In the bill of exchange mentioned, 
which has not yet been i>aid. but also ex- 
IKudcd a large sum, to wit, £42. 7s., In un- 
successfully suing Hancorne, and also paid 
£17 to him as his costs. The second count, 
after slating the dniwlng of the bill accord- 
ing to the custom of meri-liants, by Fox, as 
In the first count, alleged that the defendant, 
well knowing the premises, did falsely and 
decellfidly represent and pretend that he, 
the defendant, was duly authorized by Han- 
I'orne to accept the bill according to the 
.said usage and custom of merchants, on be- 
luilf and by the procuratlmi of Hancorne, to 
whom the same was (ilrcK'ted, and did ac- 
ci'pt the HHMie in writing under pretence of 
the procm-ntlon nforcsald; that by various 
lndr)rNemeiitN the bill cnine to the plaltitllT; 
Hint he, the plaliitllT, relying on the said 
prctende<l prociiriitinn and nuthr>rlty of Han- 
corne, and In consideration thereof, and of 
the said arceptance, received and took the 
bill ns anil for payment of n sum of money 
In the bill Hpe<-llled, In respect of goods sold 



by the plaintiff. The count then stated the 
presentment of the bill to Hancorne and his 
refusal to pay, and averred that it became 
and was the duty of the defendant to pay 
the sum in the bill specified, as the acceptor 
thereof, but that he haa refused. There was 
a similar allegation of special damage as in 
the first count. Plea, not guilty. A.t the 
trial before Lord Tenterden, C. J., at the 
London sittings after Hilary term, 1S31, it 
appeared in evidence that the defendant had 
formerly been in partnership with Hancorne, 
but was not so at the time of the present 
transaction. The latter, however, still kept 
a counting-house on the premises where the 
defendant carried on business. The bill of 
exchange drawn upon Hancorne was, in 
June, 1820, left for acceptance at that place, 
and, afterwards, a l)anker's clerk, accompa- 
nied by a Mr. Armlield, then a partner in 
the house of the payees, called for the bill. 
The defendant stated that Hancorne was 
out of town, and would not return for a 
week or ten days, and that it had better be 
presented again. This the clerk refused, 
and said it would be protested. Armfield 
then represented to the defendant that ex- 
pense would be ineuiTed by the protest, and 
assured him that it was all correct; where- 
upon the defendant, acting upon that assur- 
ance, accepted it per procuration of Mr. Han- 
corne. After this acceptance, it was in- 
dorsed over by the payees. On the return of 
Hancorne, he expressed his regret at the ac- 
ceptance, and refused to pay tlie bill. The 
plaintiff sued him, and, on the defendant 
appearing and stating the above circumstan- 
ces, was nonsuited. The present action was 
brought to recover the amount of the bill, 
and tlie costs incurred in that action, amount- 
ing in (he whole to flOO. The defendant's 
counsel contended that as there was no fraud- 
ulent or deceitful Intention on the part of 
the defendant, he was not answerable. Ix)rd 
Tenterden was of lliat opinion, but left It to 
the jury to del ermine wliether there was 
such fraudident intent or not; and directed 
them to find for the defendant If they thought 
there was no fraud, ollierwise for the pl.iin- 
tilT; giving the plaintiff leave to enter a 
verdict for the sum of £100 If the court should 
be of ojiinion that he was entitled thereto. 
The Jury found a verdict for tlie defendant. 
In the ensuing Faster term .Sir .lames Scar- 
lett obtained a rule idsl, according to the 
leave reserved, against which In the last 
term cause was shown by 

Mr. Campbell and F. Kelly. Sir .Taines 
Scarlett and Mr. Lloyd, contra. 

LOKD TKXTIOKDKN, C. .T., now delivered 
the Juilgment of the cmn't. 

In this case, In whli'li the defendant ob- 
tained n verdict on the trial before me at 
the sittings after Hilary term, a rule nisi 
was obtained to enter a verdict for thi' plaln- 
llff, and cause was shown during the last 
term. The declaiatlon eontnlne<l two counts: 



PORMATION or THE CONTRACT— ES.SENTIALS. 



67 



The first stated, that a foreign bill of ex- 
change was drawn on a person of the name 
of Hancorne, and that the defendant falsely, 
fiaudulcntly, and deceitfully did represent 
and pretend that he was duly authorized to 
accept the bill by the procuration, and on 
behalf of Hancorne, and did falsely and 
fiauduleutly pretend to accept the same by 
tlie procuration of Hancorne. It then pro- 
ceeded to allege several indorsements of tlie 
bill, and that the plaintiff, relying on the 
pretended acceptance, and believing that the 
defendant had authority from Hancorne to 
accept, received tlie bill from the last in- 
dorsee in discharge of a debt; that the bill 
was dishonoured, and that the plaintiff 
brought an unsuccessful action against 
Hancorne. The second count contained a 
similar statement of the false representa- 
tion by the defendant, and that he accepted 
the bill in writing under pretence of the 
procuration from Hancorne; and then pro- 
ceeded to describe the indorsements to the 
plaintiff, and the dishonour of the bill, and 
alleged, that thereupon it became and was 
the duty of the defendant to pay the bill as 
the acceptor thereof, but that he had not 
done so. 

On the trial it appeared, that when the bill 
was presented for acceptance by a person 
named Armfield, who was one of the payees 
of the bill, Hancorne was absent; and that 
the defendant, who lived in the same house 
with him, was induced to write on the bill 
an acceptance as by the procuration of Han- 
corne, Armfield assuring him that the bill 
was perfectly regular, and the defendant 
fully believing that the acceptance would 
be sanctioned, and the bill paid at maturity, 
by the drawee. It was afterwards passed 
into the plaintiff's hands, and being dishon- 
oured when due, an action was brought 
against Hancorne; the defendant was called 
as a witness on the trial of that action, and 
he negativing any authority from Hanconie, 
the plaintiff was nonsuited. I left to the 
jury the question of deceit and fraud in 
the defendant, as a question of fact on the 
evidence, and the jury having negatived all 
fraud, the defendant had a verdict, liberty 
being reserved to the plaintiff to move to 
enter a verdict, if the court should think the 
action maintainable notwithstanding that 
finding. 

On the argument, two points were made 
by the plaintiff's counsel. It was contend- 
ed, in the first place, that although the de- 
fendant was not guilty of any fraud or de- 
ceit, he might be made liable as acceptor of 
the bill; that the second count was applica- 
ble to th.at view of the case; and that, after 
rejecting the allegations of fraud and false- 
hood in that count. It contained a suflicient 
.statement of a cause of action against him, 
as acceptor. But we are clearly of opinion 
that the defendant cannot be made respon- 
silile in that character. It is enough to say 
ti.:it no one can be liable as acceptor but the 



person to whom the bill is addressed, unless 
> he be an acceptor for honour, which the de- 
fendant certainly was not. 

This distinguishes the present case from 
that of a pretended agent, making a promis- 
sory note (referred to in Mr. Roscoe's Digest 
of the Law of Bills of Exchange, note 9, p. 
47,) or purchasing goods in the name of a 
supposed principal. And, indeed. It may 
well be doubted if the defendant, by writ- 
ing this acceptance, entered into any con- 
tract or warranty at all, that he had author- 
ity to do so; and if he did, it would be an 
insuperable objection to an action as on a 
contract by this plaintiff, that at all events 
there was no contract with, or warranty to, 
him. 

It was in the next place contended that 
the allegation of falsehood and fraud in the 
first count was supported by the evidence; 
and that, in order to maintain this species 
of action, it is not necessary to prove that 
the false representation was made from a 
corrupt motive of gain to the defendant, or 
a wicked motive of injury to the plaintiff: 
it was said to be enough if a representation 
is made which the party making it knows to 
be untrue, and which is intended by him, or 
which, from the mode in which it is made, 
is calculated, to induce another to act on 
the faith of it, in such way as that he may 
incur damage, and that damage is actually 
incurred. A wilful falsehood of such a na- 
ture was contended to be. In the legal sense 
of the word, a fraud; and for this position 
was cited the case of Foster v. Charles, 6 
Bing. 396, 7 Bing. 105, which was twice un- 
der the consideration of the court of com- 
mon pleas, and to which may be added the 
recent case of Corbet v. Brown, 8 Bing. 33. 
The prlncii)le of these cases appears to us 
to be well founded, and to apply to the pres- 
ent. 

It is true that there the representation was 
made immediately to the plaintiff, and was 
Intended by the defendant to Induce the 
plaintiff to do the pct which caused him 
damage. Here, the representation is made 
to all to whom the bill may be offered in the 
course of circulation, and Is, In fact, intend- 
ed to be made to all, and the plaintiff is one 
of those; and the defendant must be taken 
to have Intendetl, that all such persons 
should give credit to the acceptance, and 
thereby act upon the faith of that repre- 
sentation, because that. In the ordinary 
course of business, is its natural and neces- 
sary result. 

If, then, the defendant, when he wrote the 
acceptance, and, thereby In substance, rep- 
resented that he had authority from the 
drawee to make It, knew that he had no 
such authority, (and upon the evidence there 
can be no doubt that he did,) the representa- 
tion was untrue to his knowledge, and we 
think that an action will lie against him by 
the plaintiff for the damage sustained in 
consequence. 



58 



SALES. 



If the defendant had had good reason to be- 
lieve his representation to be true, as, for 
Instance, if he had acted upon a power of 
attorney which he supposed to be genuine, 
but which was, in fact, a forgery, he would 
iave incurred no liability, for he would 
have made no statement which he knew to 
be false: a case very different from the pres- 
ent, in which it is clear that he stated what 
he knew to be untrue, though with no cor- 
rupt motive. 

It is of the greatest importance in all trans- 
actions, that the tnith should be strictly ad- 
hered to. In the present case, the defend- 
ant no doubt believed that the acceptance 



would be ratified, and the bill paid wheu 
due, and if he had done no more than to 
make a statement of that belief, according 
to the strict truth, by a memorandum ap- 
pended to the bill, he would have been 
blameless. But then the bill would never 
have circulated as an accepted bill, and it 
was only in consequence of the false state- 
ment of the defendant that he actually had 
authority to accept, that the bill gained its 
credit, and the plaintiff sustained a loss. 
For these reasons we are of opinion that the 
rule should be made absolute to enter a ver- 
dict for the plaintifE. 
Rule absolute. 



FOHMATION OF THE CONTIIACT— ESSENTIALS. 



DERRY et al. v. PEEK. 

(L. R. 14 App. Cas. 337.) 

House of Lords. July 1, 18S9. 

Appeal from court of appeal. 

Action on the case brought by Sir Henry 
William Peek asainst William Deny, chair- 
inaii, and J. C. Wakefield, M. M. Moore, J. 
Pothvvick, and S. J. Wilde, four of the direct- 
oi-.s of the Plymouth, Devonport & District 
'I'ramways Company, for damages for alleged 
fraudulent misrepresentations of defendants 
wliereby plaintiff was Induced to take shares | 
in the company. The company was incorpo- 1 
rated in 18S2 by special act (4.") & 40 Vict. c. ] 
mil), which provided, inter alia, that the cars i 
used on the tramways might be moved by i 
animal power, and, with the consent of the 
l)oaid of trade, by steam or any mechanical i 
power, for fixed periods, and subject to the 
regulation of the board. The tramways act [ 
of 1870 (.33 & 34 Vict. c. 78) provides that all i 
cars used on any tramway shall be moved by 
the power prescribed by the special act, and, I 
where no such power is prescribed, by ani- 
mal power only. In 1SS3 the defendants, as 
directors of the company, issued a prospectus 
containing the following paragraph: "One 
great feature of the undertaking, to which 
considerable importance should be attached, 
is that, by the special act of parliament ob- 
tained, the company has the right to use 
steam or mechanical motive power, instead of 
horses; and it Is fully expected that, by 
means of this, a considerable saving will re- 
sult in the working expenses of the line, as 
compared with other tramways worked by 
horses." Plaintiff, relying upon the repre- 
sentation of the right of the company to use 
steam or mechanical power, took shares in 
I he compan.v. Subsequently the board of 
trade refused to consent to the use of steam 
or other mechanical power, except on certain 
portions of the tramways, the result of which 
was that the company was wound up. Plain- 
tiff brought this action of deceit. At the 
trial, before Stirling, J., the action was dis- 
missed; but, on appeal to the court of ap- 
peal, the decision below was reversed. De- 
fendants appealed from the judgment of the 

court of appeal. 
Sir Horace Davey, Q. C, and Mr. Moul- 

ton, Q. C. (M. Muir Mackenzie, with them), 

for appellants. Mr. Bompas, Q. C, and Mr. 

Byrne, Q. G. (Mr. PatuUo, with them), for 

respondent. 

Lord HERSCHELL. My lords, in the 
statement of claim in this action the respond- 
ent, who is the plaintiff, alleges that the ap- 
pellants made, in a prospectus issued by 
them, certain statements which were untrue; 
that they well knew that the facts were not 
as stated in the prospectus, and made the 
representations fraudulently, and with the 
view to induce the plaintiff to take shares in 
the company. "This action is one which is 



conuuonly called an action of 'deceit' a mere 
common-law action." This is the description 
of it given by Cotton, L. J., in delivering judg- 
ment. I think it important that it should be 
borne in mind that such an action differs es- 
sentially from one brotight to obtain rescis- 
sion of a contract on the ground of misrepre- 
sentation of a material fact. The principles 
which govern the two actions differ widely. 
Where rescission is claimed it is only neces- 
sary to prove that there was misrepresenta- 
tion. Then, however honestly It may have 
been made, however free from blame the 
person who made it, the contract, having 
been obtained by misrepresentation, cannot 
stand. In an action of deceit, on the con- 
trary, it is not enough to establish misrepre- 
sentation alone. It is conceded on all hands 
that something more must be proved to cast 
liability upon the defendant, though it has 
been a matter of controversy what addition- 
al elements are requisite. I lay stress upon 
this, because observations made by learned 
judges in actions for rescission have been cit- 
ed, and much relied upon at the bar by coun- 
sel for the respondent. Care must obviously 
be obsen-ed in applying the language used in 
relation to such actions to an action of deceit. 
Even if the scope of the language used ex- 
tend beyond the particular action which was 
being dealt with, it must be remembered that 
the learned judges were not engaged in de- 
termining what is necessary to support an 
action of deceit, or in discriminating with 
nicety the elements which enter into it. 

There is another class of actions which I 
must refer to also for the purpose of putting 
it aside. I mean those cases w'here a per- 
son within whose special province it lay to 
know a particular fact has given an errone- 
ous answer to an inquiry made with regard 
to it by a person desirous of ascertaining the 
fact for the purpose of determining his course 
accordingly, and has been held bound to make 
good the assurance he has given. Burrowes 
V. Ivock. 10 Ves. 470, may be cited as an ex- 
ample, where a trustee had been asked by 
an intended lender, upon the security of a 
trust fund, whether notice of any prior in- 
cumbrance upon the fund /had been given to 
him. In cases like this, i^'has been said that 
the circumstance that the answer was hon- 
estly made, in the belief ,ihat it was true, af- 
fords no defense to the action. Lord Sel- 
borne pointed out in Brownlie v. Campbell, L. 
B. 5 App. Cas. 035, that these cases were In 
an altogether different category from actions 
to recover damages for false representation, 
such as we are now dealing with. 

One other observation I have to make be- 
fore proceeding to consider the law which 
has been laid down by the learned judges in 
the court of appeal in the case before your 
lordships. "An action of deceit is a common- 
law action, and mtist be decided on the same 
principles, whether it be brought in the chan- 
cery division or any of the common-law di- 



60 



SALES. 



visions; there being, in my opinion, no sucli 
thing as an equitable action for deceit." This 
was the language of Cotton, L. J., in Ark- 
wright T. Xewbold, 17 Ch. Div. oOl. It was 
adopted by Lord Blackburn in Smith v. Chad- 
wick, L. R. 9 App. Cas. 193, and is not, I 
think, open to dispute. 

In the com-t below, Cotton, L. J., said: 
"What, in my opinion, is a correct statement 
of the law, is this: that where a man makes 
a statement to be acted upon by others which 
is false, and which is known by him to be 
false, or is made by him recklessly, or with- 
out care whether it is true or false,— that is. 
without any reasonable ground for believing 
it to be true, — he is liable in an action of de- 
ceit, at the suit of any one to whom it was 
addressed, or any one of the class to whom 
it was addressed, and who was materially in- 
duced by the misstatement to do an act to 
his prejudice." About much that is here 
stated there cannot, I think, be two opinions. 
But when the learned lord justice six^aks of 
a statement made recklessly, or without care 
■whether it is true or false,— that is, without 
any reasonable ground for believing it to be 
ti-ue,— I find myself, with all respect, unable 
to agree that these are convertible e.Kpros- 
sions. To make a statement careless whetli- 
er it be true or false, and therefore without 
any real belief in its truth, appears to me to 
be an essentially different thing from making, 
through want of care, a false statement, which 
is nevertheless honestly believed to be true; 
and it is surely conceivable that a man may 
believe that what he .stales is the fact, though 
he has been so ■wanting in care that the 
court may think that there were no stilli- 
cient grounds to warrant his belief. I shall 
liave to consider hereafter whether the want 
of reasonable ground for believing the state- 
ment made is sufliclent to supiwrt an action 
of deceit. I am only concerned for the mo- 
ment to point out that It does not follow tJiat 
it is so because there is authority for saying 
that: a statement made recklessly, without 
caring whether it be true or false, affords 
sufficient foundation for such an action. 
That the learned lord justice thought that, if 
a false statement were made wiUiout ri'ason- 
ablo ground for believing it to be true, an ac- 
tion of deceit would lie, is clear from a suhso- 
nuont passage in his judgment, lie .says lliat 
when statements are made in a prospectus 
like the present, to be circulated among per- 
sons In order to induce them to lake sliares, 
"there Is a duty cu.st upon the director or oth- 
er person whip makes those BtuteMients lo lake 
care that there are no expressions hi lliein 
which In fact are r.ilao; to tjike can? that he 
has ri'nsonable siciiujd for the material .>iiale- 
inenls which are contained In that docu- 
ment which he prepares and clrculatcH for 
the very purpose of Its lielng acted upon by 
others." Tlie learned Judge proceeds lo say: 
"Although, In my opitiloii. It Is not nei'esHjiry 
that there should be what I should call fraud, 



yet in these actions, according to my view 
of the law, there must be a departure from 
duty; that is to say, an untrue statement 
made, ■without any reasonable ground foi 
believing that statement to be true; and. in 
my opinion, when a man makes an untrut 
statement, with an intention that it shall 
be acted upon, without any reasonable 
ground for believing that statement to be 
true, he makes a default in a duty which was 
thrown upon him from the position he has 
taken upon himself, and he violates the right 
which those to whom he makes the statement 
have to have true statements only made to 
them." 

No^w, I have first to remark on these ob- 
servations that the alleged "right" must 
surely be here stated too widely, if it is in- 
tended to refer to a legal right, the violation 
of w-hich may give rise to an action for dam- 
ages. For, if there be a right to have true 
statements only made, this will render liable 
to an action those who make untrue state- 
ments, however innocently. This cannot 
have been meant. I think it must have been 
intended to make the statement of tlie right 
correspond ■with that of the alleged duty, the 
departure from which is said to be making 
an untrue statement without any reasonable 
ground for believing it to be true. I have 
further to observe that the lord justice dis- 
tinctly says that, if there be such a depart- 
ure from duty, an action of deceit can be 
maintained, though there be not what he 
should call fraud. I shall have by and by to 
consider the discussions which have arisen 
as to the difference between tlie popular un- 
derstanding of the word "fraud" and the in- 
tcrju'etation given to it by lawyers, which 
have led to the use of such expressions as 
"legal fraud," or "fraud in law;" but I may 
state at once that, in my opiuion, without 
proof of fraud no action of deceit is main- 
tainable. When I examine the cases which 
have been decided upon this branch of the 
law, I shall endeavor to show that there is 
abundant authority to warrant this proposi- 
tion. 

I return now to the judgments delivered 
in the court of appeal. Sir .Tames llMiiiien 
says: "I take the law to be that if a man 
takes upon himself to assert a thing to be 
true which he does not know to be true, and 
has no reasonable ground to believe to be 
tr\u', in order to induce another to act upon 
the assertion, who does so act, and Is there- 
by dainMille<l, the person so d:imnilied Is 
entitled lo niainlaln an action for deceit." 
Again, Lopes, L. .7., st;i!es what, in his opin- 
ion. Is the result of the cases. I will not 
trouble your lordships with iiuoting the first 
three proposliinns which he lays down, al- 
though I do not feel sure th;it the third Is 
distinct from. :ind not ralhei- an Instance of. 
the case dealt with by the second proposi- 
tion. Hut he says that a person making n 
false stJilemenl, inlended to be in fact relied 



sieil 
Hit 

sucl 
11 



rOKMATlON OF THE CONTRACT— ESSENTIALS. 



61 



m by the person to whom it is uiailo, may bo 
<ue(l Ijy the person damaged thereby, "fourth- 
y, if it is untrue in fact, but beheved to be 
;rue, but without any reasonable ground for 
■iueh belief." 

It will thus be scon that all the learned 
judges concurred in thinking that it was suf- 
acient to prove that the representations made 
were not in accordance with fact, and that 
the person making them had no reasonable 
ground for believing them. They did not 
treat the absence of such reasonable gi-ound 
as evidence merely that the stiitements were 
made recklessly, careless whether they were 
true or false, and without belief that they 
were true; but they adopted as the test of 
liability, not the existence of belief in the 
truth of the assertions made, but whether 
the belief in them was founded upon any rea- 
sonable gi'oimds. It will bo seen, further, 
that the court did not puiiiort to be estab- 
lishing any new dcclrine. They deemed that 
ithey were only following the cases already 
decided, and that the proposition which they 
concurred in laying down was establislied 
by prior authorities. Indeed, Lopes, L. J., 
expressly states the law in this respect to be 
well settled. This renders a close and critical 
'examination of the earlier authorities nec- 
' essary. 

I need go no further back than the leading 
case of Pasley v. Freeman, 2 Smith, Lead. 
Gas. 94. If it was not there for the firet 
time held that an action of deceit would lie 
in respect of fraudulent representations 
against a person not a party to a contract in- 
duced by them, the law was, at all events, 
not so well settled but that a distinguished 
judge, Grose, J., differing from his brethren 
on the bench, held that such an action was 
not maintainable. BuUer, J., who held that 
the action lay, adopted In relation to it the 
language of Croke, J., in Baily v. Merrell, 3 
Bulst. 95, who said: "Fraud without dam- 
age, or damage without fraud, gives no 
cause of action, but where these two do con- 
cur * * * an action lies." In reviewing 
the case of Crosse v. Gardner, Carth. 90, 
he says: "Knowledge of the falsehood of the 
thing asserted is fraud and deceit;" and, 
further, after pointing out that in Risney v. 
Selby, 1 Salk. 211, the judgment proceeded 
wholly on the gi'ound that the defendant 
knew what he asserted to be false, he adds: 
"The assertion alone will not maintain the 
action, but the plaintiff must go on to prove 
that it was false, and that the defendant 
knew It to be so;" the latter words being 
specially emphasized. Kenyon, C. J., said: 
"The plaintiffs applied to the defendant, tell- 
ing him that they were going to deal with 
Falch. and desired to be informed of his cred- 
it, when the defendant fraudulently, and 
knowing it to be otlierwise, and with .a d(^ 
sign to deceive the plaintiffs, made the false 
affirmation stated on the record, by which 
they sustained damage. Can a doubt be 



entertained for a moment but that Is injuri- 
ous to the plaintiffs'.'" In this case it was 
evidently considered that fraud was the basis 
of Iho action, and that such fraud might 
consist in making a statement known to be 
false. Haycraft v. Creasy, 2 East, 92, was 
again an action in respect of a false affirma- 
tion made by the defendant to the plaintiff 
about the credit of a third party whom the 
plaintiff was about to tnist. The words com- 
plained of were: "I can assiu-e you of my 
own knowledge that you may credit Miss R. 
to any amount with perfect safety." All the 
judges were agre(Ml that fraud was of the 
essence of the action, but they differed in 
their view of the conclusion to be drawn 
from the facts. Lord Kenyon thought that 
fraud had been proved, because the defendant 
stated that to be true within his own knowl- 
edge which he did not know to be true. The 
other judges, thinking that the defendant's 
words vouching his own knowledge were no 
more than a strong expression of opinion, 
inasmuch as a statement concerning the cred- 
it of another can be no more than a mat- 
ter of opinion, and that he did believe the 
lady's credit to be what he represented, held 
that the action would not lie. It is beside 
the present purpose to inquire which view of 
the facts was the more sound. Upon the law 
there was no difference of opinion. It is a 
distinct decision that knowledge of the falsity 
of the affirmation made is essential to the 
maintenance of the action, and that belief 
in its truth affords a defense. 

I may pass now to Foster v. Charles, 7 
Bing. 105. It was there contended that the 
defendant was not liable, even though the 
rei^resentation he made was false to his 
knowledge, because he had no intention of 
defrauding or injuring the plaintiff. This 
contention was not upheld by the court. 
Tindal, C. J., saying: "It is a fi-aud in 'aw 
if a party makes representations which he 
knows to be false, and injury ensues, al- 
though the motives from which the repre- 
sentations proceeded may not have been bad.'' 
This is the first of the cases in which I have 
met with the expression "fraud in law." It 
was manifestly used in relation to the argu- 
ment that the defendant was not actuated 
by a desire to defraud or injure the persou 
to whom the representation was made. The 
popular use of the word "fraud" perliaps 
involves generally the conception of such a 
motive as one of its elements. But I do not 
think the chief justice intended to indicate 
any doubt that the act which he character- 
ized as a fraud in law was in truth fraudu- 
lent as a matter of fact also. Willfully to 
tell a falsehood, intending that another shall 
be led to act upon it as if it were the truth, 
may well be termed fraudulent, whatever 
the motive which induces it, though it be 
neither gain to the person making the a.«- 
sertion nor injury to the person to whom it 
is made. 



62 



SALES. 



Foster v. Charles. 7 Bin^. 105, was fol- 
lowed in Corbett v. Brown, S Bins. 33, and 
shortly afterwards in rolliill v. Walter, 3 
Barn. & Adol. 114. The learned counsel for 
tlie respondent placed great reliance on this 
case, because, although the jury had nega- 
tived the existence of fraud in fact, the de- 
fendant was nevertheless held liable. It is 
plain, however, that all that was meant by 
this finding of the jury was that the dofend- 
ant was not actuated by any corrupt or im- 
proper motive, for Lord Tentcrden says: "It 
was contended that, * • * in order to 
maintain this species of action, it is not nec- 
essary to prove that the false representation 
was made from a corrupt motive of gain to 
the defendant or a wicked motive of injury 
to the plaintiff. It was said to be enough if 
a representation is made which the party 
making it knows to be untrue, and which 
is intended by him, or which from the 
mode in which it is made is calculated, to 
induce another to act on the faith of it 
in such a way as that he may incur dam- 
age, and that damage Is actually incurred. 
A willful falseliood of such a nature was 
contended to be, in the legal sense of the 
word, a fraud, and for this position was cit- 
ed Foster v. Charles, 7 Biug. 105, lo which 
may be added the recent case of C'.irbett v. 
Brown. S Biug. 33. T)ip priuciiilo nf those 
cases appears to be well founded, and to ap- 
ply to the present." 

In a later case of Crawshay v. Thompson, 
4 .Man. &. G. 357, Maule, .1.. explains IV.lhill 
v. Walter, 3 Barn. & Adol. Ill, thus: "If a 
wrong be done by a false representation of 
a party who knows such representation to 
be false, the law will Infer an intention to 
Injure. That is the effect of rolhill v. Wal- 
ter." In the same case, Cresswell, J., de- 
lines "fraud iu law" In terms which have 
been often quoted. "The cases," ho says, 
"may be considered to establish the prin- 
ciple that fraud In law consists in knowingly 
asserting that which Is false In fact to the 
Injury of another." 

In .Mocns v. lleyworlh, 10 Mors. & W. 157, 
wlilch was devilled in the same year as Craw- 
shay v. Thompson, 4 Man. & G. 357, Ix)rd 
Ablngcr having suggested that an action of 
fraud might bo maintained where no moral 
blame was to be linpnied, Parke, B., said: 
"To support that count [viz., n comit for 
fraudulent repre«ent(itlon] It was essential 
to provi- that the defendnnlN, knowingly, 
[and I observe that this word Is euipliaNJi'.ed,] 
by words or artH, nmde such a repriHcnta- 
tion an U stated In (he third count, relative 
fo tho Invoice of these (jonds, as tliry knew to 
l)o untrue." 

The next ense In tho series (Taylor v. Ash- 
ton, II M iVr W. 401) Is line which strikes 

iiif as lii'lng of gn-at liiip"rlance. It was an 
nctl<in lironght ngiiliist directors of a bunk 
for frniidiileiil I'eiiri'Hi'UlatliiiiH ns to lt« iif- 
fairs, whereby the plaintiff \mih Induci-d to 
tnkc sliuroM. 'J'he Jury found the defendanls 



not guilty of fraud, but expressed the opin- 
ion that they had been guilty of gross neg- 
ligence. Exception was taken to the mode in 
which the case was left to the jury, and it 
was contended that their verdict was suffi- 
cient to render the defendants liable. Parke, 
B., however, in delivering the opinion of the 
court, said: "It is insisted that even that 
[viz., the gross negligence which the jury 
had found], accompanied with a damage to 
the plaintiff in conseiiuence of that gross neg- 
ligence, would be sufficient to give him a 
right of action. From this proposition we 
I entirely dissent, because we are of opinion 
I that, independently of any contract between 
! the parties, no one can be made responsible 
! for a representation of tJiis kind unless it be 
\ fraudulently made. * * * But then it was 
i said that, in order to constitute that fraud, 
j it was not necessary to show that the de- 
I fendauts knew the fact they stated to be un- 
ti'ue; that it was enough that the fact was 
untrue, if they communicated that fact for a 
deceitful purpose; and to that proposition 
tlie court is prepared to assent. It is not 
, necessary to show that the defendants knew 
the facts to be untrue; if they stated a fact 
which was untrue for a fra\idulent purpose, 
; they at the same time not believing that fact 
i to be true, in that case it would be both a 
I legal and moral fraud." 

Now, it is impossible to conceive a more 
j emphatic declaration than this: that, to su])- 
1 port an action of deceit, fraud must be 
proved, and that nothing less than fraud will 
do. I can find no trace of the idea that it 
wouUl sulUce if it were shown th.at the de- 
fend.'uus had not reasonable grounds for be- 
lieving the statements they made. It) is 
i diflicult to understand how the defendants 
j could, in the case on wliich I am cominent- 
I ing, have been guilty of gross negligence in 
making the statements they did, if they had 
: reasonable grounds for believing them to be 
t true, or if they had taken care that they had 

reasonable grounds for making them. 

I All the cases I have hitherto referred to 

I were in courts of first instance. But in 

Kvans v. Collins, 5 Q. B. SOI, 820, they were 

I reviewed by the exchcciuer chamber. The 

I judgment of the court was delivered by Tin- 

j dal, C. .1. After staling the (juestion at issue 

j to be "whether a statement or representation 

wldch Is false in fact, but not known to be 

I so by tlic party making it, but, on the con- 

j irary, made honestly, and in the full belief 

, that It was true, affords a ground of action," 

he proceeds to say: "The current of Hie a\i- 

tliorities, from Pasley v. Freeman, 2 Smitli, 

I Lead. Cas. 1)4, downwards, has laid down 

I the general rule of l;iw to be tliat fraud must 

concur with the false sintement In order to 

give u ground of action." Is It not clear 

that the coin-t considered that fraud was 

ahNeiit If the statement was "made honestly, 

and In the full belief that It was true?" 

In Kvans v. lOdnionds, 13 C. B. 777, .Alaule, 

I .T„ expressed an Important opinion, often 



FORMATION OF THE CONTRACT— ESSENTIALS. 



63 



(juoteil, which has beou thought to carry the 
law further than the previous authorities, 
though I do not think it really does so. He 
said; "If a uiau having no knowledge what- 
ever on the subject takes upon himself to 
represent a certain state of facts to exist, 
he does so at his peril, and if it be done 
either with a view to secure some benefit to 
himself, or to deceive a third person, he is 
in law- guilty of a fraud, for he takes upon 
himself to warrant his own belief of the 
truth of that which he so asserts. Although 
the person making the representation may 
have no knowledge of its falsehood, the rep- 
resentation may still have been fraudulently 
made." The foundation of this proposition 
manifestly is that a person making any 
statement which he intends another to act 
upon must be taken to warrant his belief 
in its truth. Any person making such a 
statement must always be aware that the 
person to whom it is made will understand, 
if not that he who makes it knows, yet at 
li'ast that he believes, it to be true; and, if 
he has no such belief, he is as much guilty 
of fraud as if he had made any other rep- 
resentation which he knew to be false or did 
not believe to be true. 

I now arrive at the earliest case in which 
I find the suggestion that an untrue state- 
ment, made without reasonable ground for 
believing It, will support an action for de- 
ceit. In Bank v. Addie, L. R. 1 H. L. Sc. 
145, 162, the lord president told the jury 
"that, if a case should occur of directors 
taking upon themselves to put forth in their 
report statements of importance in regard 
to the affairs of the bank, false in them- 
selves, and which they did not believe, or 
had no reasonable ground to believe, to be 
true, that would be a misrepresentation and 
deceit." Exceptions having been taken to 
this direction without avail in the court of 
sessions. Lord Chelmsford, in this house, 
said: "I agree in the propriety of this in- 
terlocutor. In the argument upon this ex- 
cei^tion the case was put of an honest be- 
lief being entertained by the directors of 
the reasonableness of which it was said the 
jury, upon this direction, would have to 
judge. But supposing a person makes an 
untrue statement, which he asserts to be 
the result of a bona fide belief in its truth, 
how can the bona fides be tested except by 
considering the grounds of such belief? 
And if an untrue statement is made found- 
ed upon a belief which is destitute of all 
reasonable grounds, or which the least in- 
quiry would immediately correct, I do not 
see that it is not fairly and correctly char- 
acterized as misrepresentation and deceit." 
I think there is here some confusion be- 
tween that which is evidence of fraud and 
that which constitutes it. A consideration 
of the grounds of belief is no doubt an im- 
portant aid in ascertaining whether the be- 
lief was really entertained. A man's mere 
assertion that he believed the statement he 



made to be true is not accepted as conclu- 
sive proof that he did so. There may be 
such an absence of reasonal)le ground for 
his belief as, in spite of his assertion, to 
carry conviction to the mind that he had 
not really the belief which he alleges. If 
the learned lord intended to go further, as 
apparently he did, and to say that, though 
the belief was really entertained, yet, if 
there were no reasonable grounds for it, the 
person making the statement was guilty of 
fraud in the same way as if he had known 
what he stated to be false, I say, with all 
respect, that the previous authorities afford 
no warrant for the view that an action of 
deceit would lie under such circumstances. 
A man who forms his belief carelessly, or is 
unreasonably credulous, may be blame- 
worthy when he makes a representation on 
which another is to act; but he is not, in 
my opinion, "fraudulent" in the sense in 
which that word was used in all the cases 
from Pasley v. Freeman, 2 Smith, Lead. 
Cas. 94, down to that with which I am 
now dealing. Even when the expression 
"fraud in law" has been employed, there 
has always been present, and regarded as 
an essential element, that the deception was 
willful, either because the untrue statement 
was known to be untrue, or because belief 
in it was asserted without such belief exist- 
ing. I have made these remarks with the 
more confidence because they appear to me 
to have the high sanction of Lord Cran- 
worth. In delivering his opinion in the 
same case he said: "I confess that my opin- 
ion was that in what his lordship [the lord 
president] thus stated he went beyond what 
principle warrants. If persons in the situa- 
tion of directors of a bank make statements 
as to the condition of its affairs which they 
bona fide believe to be true, I cannot think 
they can be guilty of fraud because other 
persons think, or the court thinks, or your 
lordships think, that there was no sufficient 
ground to warrant the opinion which they 
had formed. If a little more care and cau- 
tion must have led the directors to a conclu- 
sion different from that which they put 
forth, this may afford strong evidence to 
show that they did not really believe in 
the truth of what they stated, and so that 
they were guilty of fraud. But this would 
be the consequence, not of their having stat- 
ed as true what they had not reasonable 
ground to believe to be true, but of their 
having stated as true what they did not be- 
lieve to be true." Sir James Hannen, in 
his judgment below, seeks to limit the ap- 
plication of what Lord Cranworth says to 
cases where the statement made is a matter 
of opinion only. With all deference, I do 
not think it was intended to be or can be 
so limited. The direction which he was con- 
sidering, and which he thought went beyond 
what true principle warranted, had relation 
to making false statements of importance 
in regard to the affairs of the bank. 



(54 



.SALES. 



When this is borne in mind, and the words 
which follow those quoted by Sir James 
Hannen are looked at, it becomes to my 
mind obvious that Lord Cranworth did not 
use the words, "the opinion which they had 
formed," as meaning auythins different from 
"the belief which they entertained." The 
opinions expressed bj' Lord Cairns in two 
well-known cases have been cited as tliough 
they supported the view that an action of 
deceit might be maintained without any 
fraud on the part of the person sued. I do 
not think that they bear any such construc- 
tion. In the case of Mining Co. v. Smith, 
L. R. 4 H. L. 04, 79, he said: "If persons 
take upon themselves to make assertions as 
to which they are ignorant whether they are 
true or untrue, they must, in a civil point ot 
view, be held as responsible as if they had 
asserted that which they knew to bo untrue." 
This must mean that the persons refi'rred 
to were conscious, when making the asser- 
tion, that they were ignorant whether it was 
true or untrue; for. if not. it might be said 
of any one who innocently makes a false 
statement. He must be ignorant that it Is 
untrue, for otherwise he would not make it 
innocently. He must be ignorant tliat it is 
true, for by the hypothesis it is false. Con- 
struing the language of Lord Cairns in the 
sense I have indicated, it is no more than 
an adoption of the opinion expressed by 
Maule, J., in Evans v. Edmonds, 13 0. X:. 
777. It is a case of the represeiitatiou «f 
a person's belief in a fact when lie is con- 
scious tliat he knows not whetlior it be 
true or false, and when he has tlierefore no 
such belief. When Lord Cairns speaks of 
It as not being frauil in the more invidious 
sense, he refers, 1 think, only to the fact 
that there was no intention to cheat or In- 
jure. In I'eek v. CJurney, L. K. (5 II. L. 377, 
4t)!J, tlie same learned lord, after alluding to 
the clrcunistaMce that the defendants had 
been aciiuitted of fraud upon the criminal 
<-harge, and thai there was a great deal to 
show that they were laliciring under the 
InipresHlon that the concern had In It the 
elenicnlR of a prolltnbic conimerc'lal under- 
taking, proceeds to say: "They may be ab- 
Holved from any charge of a willful design 
or motive to nilsh'ad or defraud the public. 
Hut, In a civil proc'c-edlng of this kind, all 
timt your lordships have tn examine Is I he 
i|ui-Htlon, was there or was there not nils- 
repreHi'nlallon In point of fact? If there 
wnH, however. Iiowever innocent the mo- 
tive may liavi- been, your lonlslilps will be 
obliged to arrive nl ilie ccinNi'ipn'iiees which 
properly would rr'Hull from what was doiH'." 
Id the cnse tlii-n under conHlderatlon It was 
clenr thnt. If there had been a fiilse Hlate- 
nieiit of fad. It lind U-en knowhiKly made. 
I/ord CnlriiM <'erl»lidy cnuld not have meant 

thlil III an nclloii of d< It the only qui'stlon 

to be I'oMHlilered wnti whelher or not there 
xrnn inlHri'pre»enijillon In point of fuel. All 
thnt he there pointed out wan tlinl In KUch 



a case motive was immaterial; that it 
mattered not that there was no design to 
mislead or defraud the public if a false rep- 
resentation were knowingly made. It was 
therefore but an affirmation of the law laid 
down in Foster v. Charles, 7 Bing. 105, Pol- 
hill V. Walter, 3 Barn. & Adol. 114, and 
other cases I have already referred to. 

I come now to very recent cases. In .Weir 
V. Bell, 3 Exch. Div. 238, Lord Bramwell 
vigorously criticised the expression "legal 
fraud," and indicated a very decided opinion 
that an action founded on fraud could not 
be sustained except by the jjroof of fraud 
in fact. I have already given my reasons 
for thinking tliat, until recent times, at all 
events, the judges who spoke of fraud in 
law did not mean to exclude the existence 
of fraud in fact, but only of an intention to 
defraud or injure. 

In the same case Cotton, L. J., stated the 
law in much the same way as he did in the 
i present case, treating "recklessly" as equiv- 
I alent to "without any reasonable ground for 
believing" the statements made. But the 
same learned judge, in Arkwright v. New- 
bold, 17 Ch. Div. 301, laid down the law 
somewhat differently, for he said: "In an 
action of deceit the representation to found 
the action must not be innocent; that is 
to say, it must be made either with knowl- 
edge of its being false, or with a reckless 
disregard as to whether it is or is not 
true." And his exposition of the law was 
substantially the same in Edgington v. Fitz- 
maurice, 29 Ch. Div. 4o!). In this latter 
case Bowen, L. J., delined what the plain- 
tiff must prove in addition to the falsity 
of the statement, as "secondly, that it was 
false to the knowledge of the defendants, 
or that they made it not caring whether 
It was true or false." 

It only remains to notice the case of Smith v. 
Chailwi.k, 2o Ch. Div. 27. 44, 1)7. The late 
master of the rolls there said: "A man may is- 
sue a prospectus or nitike any other statement 
to induce another to enter Into a contract, be- 
lieving that his slatenient is true, and not 
Inteinling to deceive; but he may through 
ear("lessnes8 have made slateiiients whiih 
are not true, and which he ought to have 
known were not true, and If he does so he 
Is liable in an action for deceit. He can- 
not be allowed to escape merely because 
he had good inlentlons, and did not Intend 
to defraud." This, like everything else that 
fell from thnt learned judge, is worthy of 
ri'Mpi'clfnl consldenillon. With the last seii- 
leiH'e I quite agree, but 1 cannot assent to 
the doctrine (hat a false statement made 
through carelessness, and which ought to 
have been known to be untrue, of Itself 
renders the person who makes It liable to 
nn action for deceit. This does not seem 
lo nie by any means necessarily to amount 
to fraud, without which the action will 
not. In my opinion, lie. 
It must be remeinliered thai it was not 



FORMATION OF THE CONTRACT— ESSENTIALS. 



65 



requisite for Sir George Jessel in Smith v. 
Chiulwiek, 20 Ch. Div. 27, 44, U7, to form 
.in opinion whether a statement carelessly 
made, but honestly believed, could be the 
foundation of an action of deceit. The de- 
cision did not turn on any such point. The 
conclusion at which he arrived is expressed 
in these terms: "On the whole, I have come 
to the conclusion that this, although in some 
respects inaccurate, and in some respects 
not altogether free from imputation of 
carelessness, was a fair, honest, and bo- 
na tide statement on the part of the de- 
fendants, and by no means exposes them to 
an action for deceit." I may further note 
that in the same case Lindley, L. J., said: 
"The plaintiff has to prove— First, that the 
misrepresentation was made to him; sec- 
ondly, he must prove that it was false; 
thirdly, that it was false to the knowledge 
of the defendants, or, at all events, that 
they did not believe the truth of it." This 
appears to be a different statement of the 
law from that which I have just criticised, 
and one much more in accord with the prior 
decisions. 

The case of Smith v. Chadwick was car- 
ried to your lordships' house. L. E. 9 App. 
Cas. 187, 190. Lord Selborne thus laid down 
the law. "I conceive that, in an action of 
deceit, it is the duty of the plaintiff to es- 
tablish two things: First, actual fraud, 
which is to be judged of by the nature and 
character of the representations made, con- 
sidered with reference to the object for 
which they were made, the knowledge or 
means of knowledge of the person making 
them, and the intention which the law justly 
imputes to every man to produce those con- 
sequences which are the natural result of 
his acts; and, secondly, he must establish 
that this fraud was an inducing cause to the 
contract." It will be noticed that the noble 
and learned lord regards the proof of actual 
fraud as essential. All the other matters to 
which he refers are elements to be consider- 
ed in determining whether such fraud has 
been established. Lord Blackburn indicated 
that, although he nearly agreed with the 
master of the rolls, the learned judge had 
not quite stated what he conceived to be the 
law. He did not point out precisely how far 
he differed, but it is impossible to read his 
judgment in this case, or in that of Brownlie 
V. Campbell, L. R. 5 App. Cas. 925, without 
seeing that in his opinion proof of actual 
fraud or of a willful deception was requisite. 

Having now drawn attention, I believe, to 
all the cases having a material bearing upon 
the question under consideration, I proceed 
to state briefly the conclusions to which I 
have been led. I think the authorities es- 
tablish the following propositions: First. In 
order to sustain an action of deceit, there 
must be proof of fraud, and nothing short of 
that will suflice. Secondly. Fraud is proved 
when it is shown that a false representation 
has been made (1) knowingly, or (2) without 

GUIF.rEltS.PROP. — 5 



belief in its truth, or (3) recklessly, careless 
whether it be true or false. Although I have 
treated the second and third as distinct 
cases, I think the third is but an instance of 
the second; for one who makes a statement 
under such circumstances can have no real 
belief in the truth of what he states. To 
prevent a false statement being fraudulent, 
thei-e must, I think, always be an honest be- 
lief in its truth. And this probably covers 
the whole ground, for one who knowingly 
alleges that which is false haa obviously no 
such honest belief. Thirdly. If fraud be 
proved, the motive of the person guilty of 
it is immaterial. It matters not that there 
was no intention to cheat or injure the per- 
son to whom the statement was made. 

I think these propositions embrace all that 
can be supported by decided cases from the 
time of Fasley v. Freeman, 2 Smith, Lead. 
Cas. 94. down to Bank v. Addle, L. R. 1 H. 
L. Sc. 145, in 1867, when the first suggestion 
is to be found that belief in the truth of what 
he has stated will not suffice to absolve the 
defeudaut if his belief be based on no rea- 
sonable grounds. I have shown that this 
view was at once dissented from by Lord 
Cranworth, so that there was at the outset 
as much authority against it as for it. And 
I have met with no further assertion of Lord 
Chelmsford's view until the case of Weir v. 
Bell, 3 Exch. Div. 238, where it seems to be 
involved in Lord Justice Cotton's enunciation 
of the law of deceit. But no reason is there 
given in support of the view; it is treated as 
established law. The dictum of the late mas- 
ter of the rolls that a false statement, made 
through carelessness, which the person mak- 
ing it ought to have known to be untrue, 
would sustain an action of deceit, carried 
the matter still further. But that such an 
action could be maintained notwithstanding 
an honest belief that the statement made 
was true, if there were no reasonable grounds 
for the belief, was, I think, for the first time 
decided in the case now under appeal. 

In my opinion, making a false statement 
through want of care falls far short of, and 
is a very different thing from, fraud, and the 
same may be said of a false representation 
honestly believed, though on insufiieient 
grounds. Indeed, Cotton, L. J., himself indi- 
cated, in the words I have already quoted, 
that he should not call it fraud. But the 
whole current of authorities, with which I 
have so long detained your lordships, shows 
to my mind conclusively that fraud is es- 
sential to found an action of deceit, and that 
it cannot be maintained where the acts prov- 
ed cannot properly be so termed. And the 
case of Taylor v. Ashton, 11 Mees. & W. 
401, appears to me to be in direct conflict 
with the dictum of Sir George Jessel, and in- 
consistent with the view taken by the learn- 
ed judges in the court below. I observe that 
Sir Frederick Pollock, in his able work on 
Torts (page 243, note), referring, I presume, 
to the dicta of Cotton, L. J., and Sir George 



G6 



SALES. 



Jessel, XI. R., says that the actual decision in 
Taylor v. Ashton, 11 Mees. & W. 401, is not 
consistent with the modern cases, on the du- 
ty of directors of companies. I think he is 
right. But, for the reasons I have sivon, I 
am unable to hold that anything less than 
fraud will render directors or any other per- 
sons liable to an action of deceit. 

At the same time I desire to say distinctly 
that, wlien a false statement has been made, 
the questions whether there were reasonable 
grounds for believing it, aud what were the 
means of knowledge in the possession of the 
person making it, are most weighty matters, 
for consideration. The ground upon which 
an alleged belief was founded is a most im- 
portant test of its reality. I can conceive 
many cases where the fact that an alleged 
belief was destitute of all reasonable founda- 
tion would sutlice of itself to convince the 
court that it was not really entertained, and 
that the representation was a fraudulent 
one. So, too, although means of knowledge 
are. as was pointed out by Lord Blackburn 
In Brownlie v. Campbell, L. R. 5 App. Cas. 
925, a very different thing from knowledge. 
If I thought that a person making a false 
statement had shut his eyes to the facts, or 
purposely abstained from inquiring into 
them. I should hold that honest belief was 
absent, and that he was just as fraudulent 
as if he had knowingly stated that which 
w;is false. 

I have arrived with some reluctance at 
the conclusion to which I have felt myself 
compelled, for I think those who put before 
the public a prospectus to induce them to 
embark their money in a commercial enter- 
prise ought to be vigilant to see that it con- 
tains such representations only as are in 
strict accordance with fact, and I should be 
very imwllllng to give any countenance to 
the contrary idea. I think there Is much 
to be said for the view that this moral duty 
ought to some e.\tent to be converted Into 
n li'gal obligation, and that the want of 
r<-:iK(iniible care to see that statements maile 
miller such clrctiinstunces are true should 
bo made an actionable wrong. But this Is 
not a matter lit for discussion on the present 
occnHlon. If it Is to be done, the legisla- 
ture niUHt Intervene, and expressly give a 
right of ncllr)n In respect of such a deiHirlure 
from duty. It ought not, I think, to be 
done by strnlnlng the law, ami holding that 
to be frniidident which the tribunal feels 
t'auiiiit proprrly l)e ho (lescrlbed. 1 think 
nilHclilef Ih likely to result from blurring 
the diHllnrtlon between carelessnesH and 
frauil. and ei|iiully holding a man fraudti- 
lent wlii'thiT hlH acts can or cannot he Just- 
ly (to di'Hlgnnted. 

It now reinalnii for ine to apply what I be- 
lieve to be the law to the facts of the pres- 
ent fiiHo. The clinrge agalimt the defeiid- 
nnlw Im that tlwy frnudulently repreMcnted 
that, by the spi'i-liil iirt of parliiinn'Mt which 
the company li:iil ..i.t., in.-.i. ii„.y imil n rlclit 



to use steam or other mechanical power in- 
stead of horses. The test which I purjwse 
employing is to inquire whether the defend- 
ants knowingly made a false statement in 
this respect, or whether, on the contrary, 
they honestly believed what they stated to 
be a true aud fair representation of the 
facts. Before considering whether the charge 
of fraud is proved, I may say that I ap- 
proach the case of all the defendants, ex- 
cept Wilde, with the inclination to scrutinize 
their conduct with severity. They most im- 
properly received sums of money from the 
promoters, and this unquestionably lays 
them open to the suspicion of being ready 
to jiut before the public whatever was de- 
sired by those who were promoting the un- 
dertaking. But I think this must not be 
unduly pressed, and when I find that the 
statement impeached was concurred in by 
one whose conduct in the respect I have 
mentioned was free from blame, and who 
was imder no similar pressure, the case as- 
sumes, 1 think, a different complcKiou. I 
nmst further remark that the learned judge 
who tried the cause, and who tells us that 
he carefully watched the demeanor of the 
witnesses and scanned their evidence, came 
without hesitation to the conclusion that 
they were witnesses of truth, and that their 
evidence, whatever may be its effect, might 
safely be relied on. An opinion so formed 
ought not to be differed from except on very 
clear grounds, and, after carefully consid- 
ering the evidence, I see no reason to dissent 
from Stirling, J.'s. conclusion. I shall there- 
fore assume the truth of their testimony. 

I agree with the court below that the 
statement made did not accurately convey 
to the mind of a person reading it what the 
rights of the company were, but, to judge 
whether it may nevertheless have been put 
forward without subjecting the defendants 
to the imputation of fraud, your lordsliips 
must consider what were the circumstances. 
By the general tramways act of 1S70 it is 
provided that all carriages used on any 
tramway shall be moved by the power pre- 
8crlbe<l by the special act, and, where no 
such power is prescribed, by animal power 
only. 33 & 34 Vict. c. 78, § 34. In order, 
therefore, to enable the company to use 
steam-power, an act of parliament had to 
bo obtained empowering its use. This had 
been done, but the power was clogged with 
the condition that It was only to be used 
will) the consent of llie board of trade. It 
was therefore Incorrect to say that the com- 
IHiny had the right to use steam. They 
would only have that light If they obtained 
the consent of the board of trade. But It is 
Impossible not to sec that the fact which 
would Impress Itself upon the minds of 
those connected with the company was that 
they had, after submitting the plans to the 
boaril of trade, obtained a special act eni- 
poweiitig the use of steam. It might well 
be tli:il the fiict that the consent of the 



FORMATION OF THE CONTRACT— ESSENTIALS. 



67 



board of trade was necessary would not 
dwell in the same way upon their miuds, if 
thoy thought that the consent of the board 
would be obtained as a matter of course if 
its requirements were complied with, and 
that it was therefore a mere question of ex- 
penditure and care. The provision might 
seem to them analogous to that contained 
in the general tramways act, and I believe 
in the railways act also, prohibiting the line 
lieing opeuod until it had been inspected by 
the board of trade, and certified fit for traf- 
fic, which no one would regard as a condi- 
tion practically limiting the right to use the 
line for the purpose of a tramway or rail- 
way. I do not say that the two eases are 
strictly analogous in point of law, but they 
may well have been thought so by business 
men. 

I turn, now, to the evidence of the defend- 
ants. I will take first that of ilr. Wilde, 
whose conduct in relation to the promotion 
of the company is free from suspicion. He 
is a member of the bar, and a director of 
one of the London tramway companies. He 
states that he was aware that the consent 
of the board of trade was necessary, but 
tliat he thought that such consent had been 
practically given, inasmuch as, pursuant to 
the standing orders, the plans had been laid 
before the board of trade, with the state- 
ment that it was intended to use mechanical 
as well as horse power, and no objection 
having been raised by the board of trade, 
and the bill obtained, he took it for granted 
that no objection would be raised after- 
wards, provided the works were properly 
carried out. He considered, therefore, that, 
practically and substantially, they had the 
right to use steam, and that the statement 
was perfectly true. Mr. Pethick's evidence 
is to much the same effect. He thought the 
board of trade had no more right to refuse 
their consent than they would in the case 
of a railway; that they might have required 
additions or alterations; but that, on any 
reasonable requirements being complied 
with, they could not refuse their consent. 
It never entered his thoughts that, after 
the board had passed their plans, with the 
knowledge that it was proposed to use 
steam, they would refuse their consent. Mr. 
Moore states that he was under the im- 
pression that the passage in the prospectus 
represented the effect of section 35 of the 
act, inasmuch as he understood that the con- 
sent was obtained. He so understood from 
the statement made at the board by the so- 
licitors to the company, to the general effect 
tliat evei-y thing was in order for the use 
of steam, that the act had been obtained 
subject to the usual restrictions, and that 
they were starting as a tramway company, 
with full power to use steam as other com- 
panies were doing. Mr. Wakefield, accord- 
ing to his evidence, believed that the state- 
iiii'nt in the prospectus was fair; he never 
liaJ a doubt about it. It never occurred to 



i 



him to say anything about the consent of 
the board of trade, because, as they had got 
the act of parliament for steam, he presum- 
ed at once that they would get it. Mr. Ber- 
ry's evidence is somewhat confused, but I 
think the fair effect of it is that, though he 
was aware that under the act the consent 
of the board of trade was necessarj-. he 
thought that, the company having obtained 
their act, the board's consent would follow 
as a matter of course, and that the question 
of such consent being necessary never cross- 
ed his mind at the time the prospectus was 
issued. He believed at that time th.nt it 
was correct to say they had the right to use 
steam. 

As I have said, Stirling, J., gave credit to 
these witnesses, and I see no reason to dif- 
fer from him. What conclusion ought to be 
drawn from their evidence? I think they 
were mistaken in supposing that the con- 
sent of the board of trade would follow as 
a matter of course, because they had ob- 
tained their act. It was absolutely in the 
discretion of the board whether such con- 
sent should be given. The prospectus was 
therefore inaccurate. But that is not the 
question. If they believed that the consent 
of the board of trade was practically con- 
cluded by the passing of the act, has the 
plaintiff made out, which It was for him to 
do, that they have been guilty of a fraudu- 
lent misrepresentation? I think not. I 
cannot hold it proved as to any one of them 
that he knowingly made a false statement. 
or one which he did not believe to be true, 
or was careless whether what he stated was 
true or false. In short, I think they honest- 
ly believed that what they asserted was 
true, and I am of opinion that the charge 
of fraud made against them has not been 
established. It is not unworthy of note that, 
in his report to the board of trade. Gen. 
Hutchinson, who was obviously aware of 
the provisions of the special act, falls into 
the very same inaccuracy of language as 
is complained of In the defendants, for he 
says: "The act of 1SS2 gives the company 
authority to use mechanical power over all 
their system." I quite admit that the state- 
ments of witnesses as to their belief are by 
no means to be accepted blindfold. The 
probabilities must be considered. Whenev- 
er it is necessary to arrive at a conclusion 
as to the state of mind of another person, 
and to determine whether his belief under 
given circumstances was such as he alleges, 
we can only do so by applying the stand- 
ard of conduct which our own experience 
of the ways of men has enabled us to form, 
— by asking ourselves whether a reasonable 
man would be likely, under the circumstan- 
ces, so to believe. I have applied this test. 
With that I have a strong conviction that a 
reasonable man, situated as the defendants 
were, with their knowledge and means of 
knowledge, might well believe what thev 



\ 



68 



SALES. 



state they did believe, and consider that the 
presentation made was substantially true. 
Adopting the language of Jessel, M. R., in 
Smith V. Chadwiek. 20 Ch. Div. 67, I con- 
clude by saying that, on the whole, I have 
come to the conclusion that the statement, 
"though in some respects inaccurate and not 
altogether free from imputation of careless- 
ness, was a fair, honest, and bona fide state- 
ment on the part of the defendants, and by 
Qo means exposes them to an action for de- 



ceit" I thinli the judgment of the court of 
appeal should be reversed. 

Order of the court of appeal reversed; or- 
der of Stirling, J., restored; the respondent 
to pay to the appellants their costs below 
and In this house; cause remitted to the 
chancery division. 

See discussion of the efifect of this case by 
Sir Frederick Pollock, 5 Law Quart. Kev. 410; 
also, an article by Sir William R. Anson, 6 
Law Quart Rev. 72. 



FOUMATION OF THE CONTBACT— ESSENTIALS. 



69 



HUDNUT V. GARDNER. 

(26 N. W. 502, 59 Mich. 341.) 

Supreme Court of Michigan. Jan. 27, 1886. 

Error to Mecosta; Fuller, Judge. 

Palmer & Palmer, for appellant. Gleason & 
Bundy, for defendant 

CHAMPIJN, J. Plaintiff brought an action 
of trespass on the case against the defendant 
before a justice of the peace, and recovered 
$44.0u damages, which he claimed to have 
sustained by reason of certain false repre- 
sentations made by defendant to the effect 
that ho (defendant) was authorized as agent 
of Wetzel Bros, to get certain saw-ruill ma- 
chinery repaired at plaintiff's foundry and 
works for said Wetzel Bros., and upon their 
credit; that, relying upon such representa- 
tions, he performed said work, and delivered 
it according to defendant's instructions, and 
charged the same to Wetzel Bros, on his 
books; that in truth defendant was not 
the agent of Wetzel Bros., and had no au- 
thority whatever from them to contract with 
plaintiff, and the representations so made 
by him with reference thereto were false and 
fraudulent, and were made with intent to de- 
ceive, and did deceive, the plaintiff, and de- 
prived him of the material used in making the 
repairs and the work performed thereon. 
The plea was the general issue. On the trial 
in the circuit the parties were sworn, and 
the plaintiff's testimony proved, if the jury 
should give it credence, the representations 
set out in his declaration. The conversation, 
as he stated it, left no room for doubt or mis- 
take. The defendant testified that he was not 
the agent of Wetzel Bros, in the transaction, 
and that he had no authority to make any 
representations to plaintiff such as testified 
to by him; and his testimony proved, if the 
jury should give it credence, that he made no 
such representations as set out in plaintiff's 
declaration and testified to by him. The tes- 
timony of the plaintiff was corroborated as to 
a part of the machinery repaired or made by 
the witness Saltsman, a machinist in Hudnut's 
employ, who stated that defendant told him 
that the work was for Wetzel Bros., and he 
so entered it upon his book, and he produced 
the book in court. There was no possible way 
in which the jury could reconcile the testi- 
mony of the plaintiff and the defendant, and 
the issue was narrowed down to the question 
of credibility. If the jury believed the testi- 
mony introduced by the plaintiff, he was en- 
titled to a verdict; if they did not, or if they 
believed the defendant's, or if the testimony 
in the minds of the jury was equally balanced, 
the defendant was entitled to a verdict. 

The errors assigned relate exclusively to the 
charge of the court, and are as follows: The 
court erred in instructing the jury as follows: 
" '(1^ It is a serious charge, gentlemen, to bring 
againstau individual. but there have been men 
in the n'orld who have committed just such 



offenses,— it is an offense really, It Is an of- 
fense morally, although it is not classed in the 
eategoi-y of crimes; but a man who can do 
that is but one step removed from a criminal.' 
'(2) These representations, gentlemen, if they 
were made, and made with the intent to de- 
ceive the plaintiff,— with the intent to wrong 
and defraud him,— it would give him the right 
to recover whatever damages he might prove.' 
'(3) Said all that he was claimed to have said, 
with intent at that time to induce the plaintiff' 
to do something which would be to the plain- 
tiff's injury,— cheat him, or induce him to do 
something which would result to his loss,— 
then the plaintiff should recover such dam- 
ages as the plaintiff may prove he has suf- 
fered.' '(4) The com-t will further instruct 
you that, while viewing the testimony in this 
case from one standpoint, you might come to 
a conclusion that the plaintiff's case is fully 
substantiated,— fuUy maintained,— at the same 
time, if you are able from the testimony to 
find a full explanation of aU the circumstances 
by which this defendant would be relieved 
from any charge of fraud,— any Intent to de- 
ceive,— you have the right to do so.' '(5) If 
you should find that this plaintiff, by mistake, 
had charged this labor to the wrong party, 
unless he was caused to do it by the inten- 
tional deceit which was practiced upon him 
by the defendant, then the defendant is not 
to blame for it.' '(6) I will state to you fur- 
ther, on this question of intent: If the party 
represented to the plaintiff anything which 
was untrue, and it caused the plaintiff, if he 
used reasonable care, to act upon such sug- 
gestions, the defendant at the time knowing 
what he said was untrue, then you would have 
the right to presume, and, in fact, you could 
find, that there was an intent to defraud the 
plaintiff.' " 

The remarks of the court upon which the 
first assignment of error is based were made 
immediately after stating to the jury what 
the plaintiff claimed, and, while we see noth- 
ing in the case caUing for such remarks, we do 
not see that it was calculated to or did preju- 
dice the plaintiff's case. Had the vei'dict been 
against the defendant, we think he might 
well have complained that it tended to preju- 
dice the jury against him. 

The error in that portion of the instruction 
which is alleged in the second assignment 
of error arises under the testimony in the 
case. The question was, were representations 
made? If they were made, they were false 
beyond dispute, and the intent to deceive is 
conclusively presumed from defendant's knowl- 
edge of their falsity. And the jury should 
have been instructed that if they found that 
the representations were made, the undisputed 
evidence being that they were knowingly false 
if made, the intent to deceive was proven, and 
the plaintiff would be entitled to recover. The 
defendant himself testified that he was not 
the agent of Wetzel Bros., and had no direc- 
tions from them to have the work done for 
them, or to have it charged to them, so that 



70 



SALES. 



If he did make the representations claimed 
by plaintiff, he not only made them falsely, 
but knowing them to be false. 

In this connection, we may notice the sixth 
assignment of error. The vice of this portion 
of the iusti-uction is that the judge required 
the jury to find that the plaintiff used reason- 
able care in acting upon defendant's rep- 
resentations. There was no testimony in the 
case to which this portion of the charge could 
be applied. It introduced an unnecessarj- and 
tincertain element in the case, which the jury 
were required to pass upon without directing 
them as to what would coustitute reasonable 
care or negligence on the part of the plaintiff, 
under the evidence. And, further, tlie judge 
should have instructed the jury that if the 
defendant represented to the plaintiff any- 
thing which was untrue, and the plaintiff 



acted in reliance thereon, the defendant at 
the time knowing what he said was untrue, 
they would have the right to presume, and 
should find, that there was an intent to de- 
fraud the plaintiff. 

The fourth and fifth allegations of error 
may be considered together. We think the 
instructions embraced therein are erroneous. 
Under the testimony of the plaintiff there was 
no room for a mistake, and it was error for 
the comt to advance a theory in conflict with 
all the evidence in the case. And the testi- 
mony of the defendant did not tend to prove 
In any particular that a mistake had been 
uiade, or that a misimdcrstanding could have 
arisen from what was said at the time. 

The judgment must be reversed, and a new 
trial ordered. 

The other justices concurred. 



rOUMATION OF THE CONTUACT— ESSENTIALS. 



71 



HULL V. HULL. 

(48 Conn. 2r)0.) 

Snprome Court of Counecticut. June Term. 
1880. 

W. K. Townsend and J. H. Whiting, in sup- 
port of the motions. II. B. Munson, contra. 

LOOM IS, J. The controversy in this case 
has reference to the ownership of six colts, 
the progeny of two brood mares, which the 
plaintiff, some ten years prior to this suit, pur- 
chased in Boston of the Rev. William H. H. 
Murray. The contract of sale provided that 
the plaintiff might take the mares to Mun-ay's 
farm, in this state, of which she was and had 
been for several years the superintendent, and 
there Uoep them as breeding mares; and all 
the colts thereafter foaled from them, though 
sired by Murray's stallions, were to be the ex- 
clusive property of the plaintiff. No attempt 
has been made by Murray's creditors or his 
trustee to deprive the plaintiff of the mares so 
purchased, and they are now in her undisturb- 
ed possession; but the colts, while on Murray's 
farm, on the 1st of August, 1S79, were at- 
tached by one of his creditors, who subse- 
quently released the property to the defend- 
ant as ti'ustee in insolvency, who had the prop- 
erty in his possession at the time the plaintiff 
brought her writ of replevin. The sole ground 
upon which the defendant claims to hold tbese 
colts is that there was such a retention of pos- 
session by Murray after the sale as to render 
the ti-ansaction constructively fraudulent as 
against creditors. 

The comt below overruled this claim, and in 
so doing we think committed no error. The 
doctrine as to retention of possession after a 
sale has no application to the facts of this 
case. A vendor cannot retain after a sale 
what does not then exist, nor that which is 
already m the possession of the vendee. This 
proposition would seem to be self-sustaining. 
If, however, it needs confirmation, the authori- 
ties in this state and elsewher-e abundantly 
supply it. Lucas v. Birdsey, 41 Conn. 357; 
Capron v. Porter, 43 'Conn. 389; Spring v. 
Chipman, 6 Vt. 662. In Bellows v. Wells, 36 
^'t. 599, it was held that a lessee might con- 
vey to his lessor all the crops which might 
be grown on the leased land during the teitu, 
and no delivery of the crops after they were 
harvested was necessary even as against at- 
taching creditore, and that the doctrine as to 
retention of possession after the sale did not 
apply to property which at the time of the 
sale was not subject to attacluiieut and had 
no real existence as property at all. 

The case at bar is within the principle of 
the above authorities, for it is very clear that 
the title to the property in question when it 
first came into existence was in the plaintiff. 
In reaching this conclusion it is not necessary 
to hold that the mares became the absolute 
property of the plaintiff under ^lassachusetts 
law without a more substantial and visible 



change of possession, or that under our law, 
the title to the mares being in the plaintiff 
clearly as between the parties, the rule import- 
ed from the civil law, i)artus sequitiu' ven- 
trem, applies. We waive the consideration of 
these questions. It will suffice that, by the 
express terms of the contract, the plaintiff was 
to have as her own all the colts that might be 
born from these mares. That the law will 
sanction such a contract is very clear. It is 
true, as remarked in Perkins, Conv. tit. 
"Grant," § 65, that "it is a common learning 
in the law that a man cannot grant or charge 
that which he has not"; yet it is equally well 
settled that a future possibility arising out of, 
or dependent upon, some present right, prop- 
erty or interest, may be the subject of a valid 
present sale. The distinction is illustrated in 
Hobait, 132, as follows: "The grant of all 
the tithe wool of a certain year is good in its 
creation, though it may happen that there be 
no tithe wool in that year; but the grant of 
the wool which shall grow upon such sheep 
as the grantor may afterwards purchase, is 
void." It is well settled that a valid sale may 
be made of the wine a vineyard is expected to 
produce, the grain that a field is expected to 
grow, the milk that a cow may yield, or the 
future young born of an animal. 1 Pars. Cont. 
(5th Ed.) p. 523, note k, and cases there cited; 
Hill. Sales, § 18; Story. Sales, § 186. In Fon- 
ville V. Casey, 1 Murph. (N. C.) 389, it was 
held that an agreement for a valuable consid- 
eration to deliver to the plaintiff the first fe- 
male colt which a certain mare owned by the 
defendant might produce, vests a property in 
the colt in the plaintiff, upon the principle 
that there may be a valid sale where the title 
is not actually in the grantor, if it is in him 
potentially, as being a thing accessory to some- 
thing which he actually has. And in ilcCarty 
V. Blevins, 5 Yerg. 195, it was held that where 
A. agrees with B. that the foal of A.'s mare 
shall belong to C, a good title vests in the 
latter when parturition from the mother takes 
place, though A. immediately after the colt 
was born sold and dehvered it to D. 

Before resting the discussion as to the plain- 
tiff's title, we ought perhaps briefly to allude 
to a claim made by the defendant, both in 
the comt below and in this court, to the ef- 
fect that if the plaintiff's title be conceded 
she is estopped from asserting her claim. This 
doctrine of estoppel, as all tiiers must have 
observed, is often strangely misapplied. And 
it is siu^ly so in this instance. The case fails 
to show any act or omission on the part of the 
plaintiff Inconsistent with the claims she now 
makes, or that the creditors of JIurray or the 
defendant as representing them were ever mis- 
led to their injury by any act or negligence on 
her part. On the contrary the estoppel is as- 
serted in the face of the explicit finding, that 
"as soon as the plaintiff became awaie of the 
attachment of her horses she forbade the of- 
ficer taking the same, and demanded their im- 
mediate return to her." The only fact which 
is suggested as furnishing the basis for the 



72 



SALES. 



alleged estoppel is that from the 1st of Au- 
gust, 1S79, to the 12th of Jauuarj- next follow- 
ing, "no attempt was made by the plaintiff 
to maintain her title by suit, altliough she was 
living during the time at Guilford, where said 
colts were." But who ever heard of au estop- 
pel in an action at law predicated solely on 
neglect to bring a suit for the period of live 
montlis? To recognize such a thing for any 
period short of the statute of limitatious would 
practically modify the statute and create a 
new limitation. Furthermore, in what respect 
liave the defendant and those he represents 
been misled to their injury by this fact? The 
plaintiff never induced the taking or with- 
holding of her property. And can a tort feas- 
or or the wrongful possessor of another's prop- 
erty object to the delay in suing him for his 
wrong, and claim, as in this case, an estoppel 
on the ground that his wrongful possession 
proved a very expensive one to liim, amount- 
ing even to more than the value of the prop- 



erty? He might have stopped the expense at 
any time by simply giving to the plaintiff 
what belonged to her. 

The single question of evidence which the 
record presents we do not deem it necessary 
paitJcularly to discuss. It will sufBce to re- 
mai-k that if the defendant's testimony was ad- 
missible to show that Murray, after the sale 
to the plaintiff (and, so far as appears, in her 
absence), claimed to own the mai'es and colts, 
it was a complete and satisfactory reply for 
the plaintiff in rebuttal to show that Murray's 
own entries (presumably a part of the res ges- 
taj) in the appropriate books kept by him, 
showed the fact to be otherwise, and in ac- 
cordance with the plaintiff's claims. At any 
rate it is very clear that no injustice was done 
by this ruling to furnish any ground for a 
new ti-ial. There was no error in the judg- 
ment complained of, and a new tiial is not 
advised. In this opinion the other judges con- 
curred- 



lai 

da, 

lat 

his 

Boll 

ini 

ilie 

« 

lor 

K 
T: 



FORMATION OF THE CONTRACT— ESSENTIALS. 



73 



HOLKOYD V. MARSHAJLL, 

(10 H. L. Gas. 191.) 

House of Lords. Aug. 4, 18C2. 

James Taylor cairied on the business of a 
damask manufacturer at Hayes Mill, Oven- 
den, near Halifax, in the county of York. 
In 185S he became embarrassed, a sale of 
his ehects by auction took piace, and the 
Holroyds, who had previously employed him 
in the way of his business, purchased all 
the machinery at the mill. The machinery 
was not removed, and it was agreed that Tay- 
lur should buy it back for £5,000. And in- 
denture, dated the 20th of September, 1858, 
was executed, to which A. P. and W. Hol- 
royd were parties of the first part, James 
Taylor of the second part, and Isaac Brunt 
of the third part. This indenture declared 
the "machinery, implements, and things spec- 
ified in the schedule hereunder written and 
fixed in the said mill," to belong to the 
Holroyds; that Taylor had agreed to pur- 
chase the same for £5,000, but could not then 
pay the purchase money, wherefore it was 
agreed, &c., that "all the machinery, imple- 
ments, and things specified in the schedule 
(hereinafter designated 'the said premises')" 
were assigned to Brunt, In trust for Taylor, 
until a certain demand for payment should 
be made upon him, and then, in case he 
should pay to the Holroyds a sum of £5,000, 
with interest, for him absolutely. If default 
in payment was made. Brunt was to have 
power to sell, anu hold the moneys in pursu- 
ance of the trust for sale, upon trust, to pay 
off the Holroyds, and to pay the surplus, if 
any, to Taylor. The indenture, in addition 
to a clause binding Taylor, during the con- 
tinuance of the trust, to insure to the extent 
of £5,000, contained the following covenant: 
"That all machinery, implements, and things 
which, during the continuance of this secu- 
rity, shall be fixed or placed in or about the 
said mill, buildings, and appurtenances, in 
addition to or substitution for the said prem- 
ises, or any part thereof, shall, during such 
continuance as aforesaid, be subject to the 
trusts, powers, provisoes, and declarations 
hereinbefore declared and expressed concern- 
ing the said premises; ana that the said 
James Taylor, his executors, &c., will at all 
times, during such continuance as aforesaid, 
at the request, i&c., of the said Holroyds, their 
executors, &c., do all necessary acts for as- 
suring such added or substituted machinery, 
implements, and things, so that the same 
may become vested accordingly." The deed 
was, four days afterwards, duly registered, 
as a bill of sale, under 17 & 18 Vict. c. 30. 
Taylor, who remained In possession, sold 
and exchanged some of the old machinery, 
and introduced some new machinery, of 
which he rendered an account to the Hol- 
royds before April, ISOO; but no conveyance 
was made of this new machinery to them, 
nor was any act done by them, or on their 
behalf, to constitute a formal taking of pos- 



session of the added machinery. On the 
2d April, 18G0, the Holroyds served Taylor 
with a demand for payment of the £5,000 
and interest, and no payment being made, 
they, on the 30th April, took possession of 
the machinei-y, and advertised it for sale by 
auction on the 21st May following. 

On the 13th April, 18G0, Bmil Preller sued 
out a writ of scire facias against Taylor for 
the sum of £155. 18s. 4d., damages and costs, 
which was executed on the following day 
by James Davis, an officer of Mr. Garth 
Marshall, then high sheriff of York. On the 
10th May, 18G0, a similar writ, for £138. 3s. 
3d., was executed by Davis, and on the 25th 
May, ISGO, the property was sold by the 
sheriff. Notice was given to the sheriff of 
the bill of sale executed in favour of the Hol- 
royds. The only part of the machinery 
claimed by the execution creditors consisted 
of those things which had been purchased 
by Taylor since the date of the bill of sale. 
The sheriff insisted on taking under the 
writs these added articles, and the Hol- 
royds, on the 30th May, 1860, filed their bill 
against the sheriff, and the other necessary 
parties, praying for an assessment of dam- 
ages and general relief. The cause was 
heard before Vice Chancellor Stuart, who 
on the 27th July, 1860, made an order, de- 
claring that the whole machinery in the mill, 
including the added and substituted articles, 
at the time of the execution, vested in the 
lilaiutiffs by virtue of the bill of sale. On 
apijeal, before Lord Chancellor Campbell, on 
the 22d December, 1860, the vice chancel- 
lor's order was reversed. This present ap- 
peal was then brought 

Mr. Malins and G. V. Yool, for appellants. 
Mr. Amphlett and Mr. Hobhouse, for re- 
spondents. 

Lord Chancellor WESTBURY. after stat- 
ing the facts of the case, said: 

My lords, the question is whether as to the 
machinery added and substituted since the 
date of the mortgage the title of the mort- 
gagees, or that of the judgment creditor, 
ought to prevail. It is admitted that the 
judgment creditor has no title as to the ma- 
chinery originally comprised in the bill of 
sale; but it is contended that the mortgagees 
had no specific estate or interest in the fu- 
tui-e machinei-y. It is also admitted that if 
the mortgagees had an equitable estate in 
the added machinery, the same could not be 
taken in execution by the judgment creditor. 

The question may be easily decided by the 
application of a few elementary principles 
long settled in courts of equity. In equity 
It is not necessary for the alienation of prop- 
erty that there should be a formal deed of 
conveyance. A contract for valuable con- 
sideration, by which it is agreed to make a 
present transfer of property, passes at once 
the beneficial interest, provided the contract 
is one of which a court of equity will decree 



SALES. 



specific peiforuiance. In tlie lan^ua.ire of 
Lord Hardwicke, the vendor becomes a trus- 
tee for the vendee; subject, of course, to tlie 
contract being one to be specitically per- 
formed. And this is true, not only of con- 
tracts relating to real estate, but also of 
contracts relating to personal propertj-, pro- 
vided that the latter are such as a court of 
equity would direct to be specifically per- 
formeil. 

A contract for the sjile of goods, as. for 
examiile, of five hundred chests of tea, is not 
a coutiact which would be spccilically per- 
formed, because it does not relate to any 
chests of tea in particular; but a contract 
to sell five hundred chests of the particular 
kind of tea which is now in my warehouse 
In Gloucester, is a contract relating to spe- 
cific propeny. and which would be specifically 
performed. The buyer may maintain a suit 
in equity for the delivery of a specific chat- 
tel when it is the subject of a contract, and 
for an injunction (if necessarj') to restrain 
the seller from delivering it to any other 
person. 

The effect in equity of a mere contract as | 
amounting to an alienation, may be illustiat- | 
ed by the law relating to the revocation of i 
wills. If the owner of an estate devises it 
by will, and afterwards contracts to sell it 
to a purchaser, but dies before the contract 
is performed, the will is revoked as to the 
bcneliclal or equitable interests in the estate, 
for the contract converted the testator into a 
trustee for the purchaser; and. in like man- 
ner, it the purchaser dies Intestate before per- 
formance of the contract, the eiiuiialilc estate 
descends to his heir at law, who may reciuire 
the pereonal representative to i)ay the pur- 
chase money. But all this depends on the 
contract being such as a court of equity would 
decree to be specitically perforuuHl. 

There can be no doubt, therefore, that If 
the mortgngo deed in the present case had 
contained nothing but the contract which is 
Inviilved In the aforesaid covenant of Taylor, 
the mortgagor, such cdiilnict would have 
aniiiiuited to a valid assignment In eiiully of 
the whole of the machinery and chattels In 
question, siippiising hucIi machinery and cf- 
fects to have been In existence an<l upon the 
mill at the time of the execution of the deed. 

Hut It Ih nliegeil that this Is not the effect 
iif the ciinlnict, licinuse It relates to ma 
I'hiiji-ry not exlHlhig at the lime, but to be 
iicqulri'd and llxed and plaicd In the mill 
at a ruturo time. It In quite (rue tlint a deed 
vvlilrli priifiiweN to convey prcipcMly wliU'li Is 
not In exiHtuncc at the time Is as a ccinvcy- 
ance volil nt Inw, Kimply bctause there Is 
nnllilng to convey. ,Sr> In (HinKy a fimtracl 
whii-li I'MuagcH to transfer pruperly, which In 
not In exiHti'iiee, cnniml iiperale ns an lin- 
niiMllalo nllennllnn merely lieeaiise there Ih 
uothlng to IrnnNfer. 

Hut If n vi'hdor or inortgnKor ngrecH to hiOI 
or niortynKe prop4Tly, real ur perHimfll, <if 
which he In not poMsettHed n( the lime, anil he 



receives the consideration for the contract, 
and afterwards becomes possessed of prop- 
erty answering the description in the con- 
tract, there is no doubt that a court of equity 
would compel him to perform the contract, 
and that the contract would, in equity, trans- 
fer the beneficial interest to the mortgagee 
or pm'chaser immediately on the property be- 
ing acquired. This, of course, assumes that 
the supposed contract is one of that class of 
which a court of equity would decree the 
specific performance. If it be so, then im- 
mediately on the acquisition of the property 
described the vendor or mortgagor would 
hold it in trust for the purchaser or mort- 
gagee, according to the terms of the contract. 
For if a contract be in other respects good 
and fit to be performed, and the considera- 
tion bus been received, incapacity to perform 
it at the time of its execution will be no an- 
swer when the means of doing so are after- 
wards obtained. 

Apply these familiar principles to the pres- 
ent case; it follows that immediatelj- on the 
new machinery and effects being fixed or 
placed in the mill, they became subject to 
the operation of the contract, and passed in 
equity to the mortgagees, to whom Taylor 
was bound to make a legal conveyance, and 
for whom he, in the mean time, was a trustee 
of the property in question. 

Tliere is another criterion to prove tliat the 
mortgagee acquiicd an estate or interest in 
the added machinery as soon as it was 
brought into the mill. If afterwards the 
mortgagor had attempted to remove any part 
of such machinery, except for the purpose nf 
substitution, the mortgagee would have been 
entitled to an injunction to restrajn such re- 
moval, and that because of his estate in the 
specific property. The result is, that the ti- 
tle of the appellants is to be preferred to Uiat 
of the judgment creditor. 

Some use was made at the bar and in the 
court below of the language attributed to Mr. 
Baron I'arke in the case of Mogg v. Baker, 
3 Mees. & W. 108. That learned judge ap- 
pears to have given, not his own opinion, but 
what he understood would have been the de- 
cision of a court of equity upon the ca.se. lie 
Is represented as speaking upon the authority 
of one of the Judges of the court of chancery. 
Any conmiuniealion so made was of course 
exira-judlclal, and there Is much danger In 
making communications of such a nature the 
ground of judicial decision; but I entirely 
concur In what appears to have been the 
prinelple Inlendeil to be stated; for Mr. Baron 
rarke, si)eaklng of the agreement In the case, 
Huys. "It woidd cover no s]ieclllc furniture, 
and would confer no right in eciuity." I have 
alriiidy explained, that a contract relating to 
goods, but not to any speelllc goods, would 
not be the subject of a decree lor specilic 
IK'rrorniance, and that a conlnn^t that could 
not be Hpeclllcally performed would not avail 
to tiansfer any estate or lMl<"resl. 

If, therefore, the contract In Mogg v. Baker 



FOIIMATION OF THE CONTRACT— ESSENTIALS. 



75 



related to no specific furniture, it is true ttiat 
it would not, at tlie time of its execution, con- 
ler any riglit in eciuity; but it is etinally true 
that it would atlaeU on furniture answering; 
the contrict when acquired, provided the 
eoutraet remained in force at the time of 
such ae(iuisitioii. 

Whetlier a correct construction was put up- 
on the agreement in Mogg v. Baker is a dif- 
ferent Mueslion, and which it is needless to 
consider, as I am only desirous of showing 
that the proposition stated by the learned 
judse is quite consistent with the principles 
on whi('h this case ought to be decided. 

I therefore advise your lordships to reverse 
the order of Lord Chancellor Canipliell, and 
<lirect the petition of rehearing presented to 
him to be dismissed, with costs. 

Lord WENSLEYDALE. My lords, more 
than a year ago, when this case was argued 
at your lordships' bar with very great abil- 
ity on both sides, on behalf of the appellants 
Ijy Mr. Malins and Mr. Yool, and on behalf 
of the respondents by Mr. Amphlett and Mr. 
Ilobhouse, the late lord chancellor, with that 
extraordinary industry which he possessed, 
immediately after the argument committed 
his opinion to paper, and I was favoured 
with a perusal of that opinion, which I read 
with great attention. My noble and learned 
friend opposite (Lord CHELxMSPORD) also 
committed his opinion to paper, and he fa- 
voured me with its perusal. Upon considering 
those opinions and the argument I had heard 
at tlie bar, my opinion then concurred with 
that of the late lord chancellor. But now 
that the matter has been argued a second 
time, and I have heard the opinion of the 
lord chancellor upon it, and find that the 
opinion of my noble and learned friend op- 
posite is the same as it was before. I cannot 
say that I feel myself so confident in the ar- 
guments that have presented themselves to 
my mind as to press your lordships to adopt 
them. 

1 have heard the very able and vei-y clear 
opinion which the lord chancellor has pro- 
nounced, and I cannot help saying, that I 
thinLc that the views which I adopted upon 
the subject after the first argument were 
not correct. I feel, therefore, that I must 
acquiesce in the judgment proposed. 

Lord CHELMSFORD. My lords, this case, 
which has become of great importance, has 
been twice fully and ably argued, there hav- 
ing been a difference of opinion amongst 
your lordships upon the first argument, which 
made it desirable that a second should take 
lilace. Upon the original argument I thought 
that the decree of my late noble and learned 
friend. Lord Campbell, could not be main- 
tained; but I came to this conclusion with 
all the deference due to his great legal ex- 
lierience, and with the more doubt as to the 
soundness of my views, upon finding not 
only that he adluM-ed to his opinion on hear- 



ing the question argued in this house, but 
that he was supported in it by my noble and 
learned friend. Lord WEXSLEYDALE, for 
whose judgment (it is unnecessary to say) I 
entertain the most sincere respect. Aware 
that I was opposed to such eminent author- 
ities, I listened to the second argument with 
the most earnest and anxious attention; but 
nothing which I heard in the course of it 
tended to shake the opinion which I had 
originally formed. I should, therefore,, have 
beeu compelled to state this opinion under 
such discouraging circumstances, if I had not 
happily been fortified by the concurrence of 
the noble and learned lord upon the wool 
sack, before whom the last argument took 
place. His great learning and long experi- 
ence in courts of equity justify me now in 
expressing myself with some confidence in 
a case in which his views coincide with 
mine, and which is to be decided upon equi- 
table grounds and principles. 

In considering the question, I propose to 
advert to the various lioints which were 
touched upon in the course of both the argu- 
ments, although ui3on the last occasion many 
were omitted which were raised upon the 
first. The question in the case is, whether 
the appellants, who have an equitable title 
as mortgagees of certain machinery fixed 
and placed in a mill, of which the mortgagor, 
James Taylor, was tenant, are entitled to the 
property which was seized by the sheriff, 
under two writs of execution issued against 
the mortgagor, in priority to those execu- 
tions, or either of them? 

The title of the appellants depends upon a 
deed dated the 20th September, ISoS. [His 
lordship here stated the bill of sale and the 
other facts of the case.] The machinery sold 
by the sheriff was more than sufficient to 
satisfy the first execution, and the appellants 
claiming a preference over both executions, 
contend that the possession taken by them 
on tlie 30th April entitled them, at all events, 
to priority over the second execution of the 
11th May. The great question, however, is, 
whether they are entitled to a preference 
over the first execution by the mere effect of 
their deed? or whether it was necessai-y that 
some act should have been done after the 
new machinery was fixed or placed in the 
mill, in order to complete the title of the ap- 
pellants? 

It was admitted that the light of the judg- 
ment creditor, who has no specific lieu, but 
only a general security over his debtor's prop- 
erty, must be subject to all the equities 
which attach upon whatever property is tak- 
en under his execution. But it was said 
(and truly said) that those equities must be 
complete, and not inchoate or imperfect, or 
in other words, that they must be actual 
equitable estates, and not mere executory 
rights. 

What, then, was the nature of the title 
whicli the mortgagees obtained under their 
mortgage deed? If the question had to be 



76 



SALES. 



decided at law, there would be no diffioiilty. 
At law an assignment of a thing which has 
no existence, actual or potential, at the time 
of the execution of the deed, is altogether 
Toid. Robinson v. Macdonnell, 5 Maule & S. 
228. But where future property is assigned, 
and after it comes into existence, possession 
is either delivered by the assignor, or is al- 
lowed by him to be taken by the assignee, 
in either case there would be the novus ac- 
tus interveniens of the maxim of Lord Ba- 
con, upon which Lord Campbell rested his 
decree, and the property would pass. 

It seemed to be supposed upon the fust ar- 
gument that an assignment of this liiud 
would not be void in law if the deed contain- 
ed a license or power to seize the after-ac- 
quired property. But this circumstance 
would make no dilTerence in the case. The 
mere assignment is itself a sutHcient declara- 
tlo propcedens in the words of the maxim; 
and although Chief Justice Tinilal. in the 
case of Lunn v. Thornton, 1 C. B. 379, said, 
"It is not a question whether a deed might 
not have been so framed as to give the de- 
fendant a power of seizing the future per- 
sonal goods," he must have meant, that un- 
der such a power the assignee miglit have 
taken possession, and so have done the act 
which was necessary to perfect liis title at 
law. This will clearly appear from the case 
of Congreve v. Evetts, 10 Kxch. 2118. In which 
there was an assignment of growing crops 
and effects as a security for money lent, 
with a power for the assignee to seize and 
t:ike possession of the crops and elTet^ts bar- 
gained and sold, and of all such crops and 
effects as might be sulistitutod for them; and 
Bari'U Parke said, "If tlie authority given by 
the debtor by the bill of sale had not been 
executed. It would have been of no avail 
against the exc<-ullon. It gave no legal ti- 
tle, nor even equltnlde title, to any speclllc 
goods; but wlien executed not fully or en- 
tirely, but only to the extent of taking pos- 
session of the growing crops. It Is the same 
In our Jtidgnient as If the debtor himself luid 
put the plaintiff in actual possession of those 
cpips." And In Hope v. Ilaylcy, .5 El. & 
Bl. KV\ tmr, (a rase much relied upon by tho 
vice chancellor), wiiere there w.'is an agr(«- 
inent to transfer goods, to be nfterwards ac- 
qnlrert and KubHtltiiteil, wlili n power to take 
posNcKslon of nil original and substituted 
goods, Lord Campbell, ("hlef .lustlce, snid, 
"Tho Intention of the contracting parties 
wnM, that till' present nnil future properly 
slioidd imM by the dii'd. That emdd not bo 
• •iirrled Into effect by n mere trniisrer: but 
the dfvd rontnlneil n liceMse to the gniiitee 
to ptiler upon till- |iro|ierty. and that lli'eiise, 
%vlion acted «rn>ii, took I'ffect Independently 
"f the trnnBfer" 

I hnvo thought It right to dwell n little up 
on these cnH<>«, both on ncrmint of some t'X- 
prrwiloiiK which were ime<l In arguiiieiit ro- 
uportlnc Ihein. and nNo becmiHe In iloior- 
mlnlnir the preiieni ipu-Htlon It In usi-rnl to 



ascertain the precise limits of the doctrine 
as to the assignment of future property at 
law. The decree appealed against proceeds 
upon the gro'ind. not indeed that an assign- 
ment of future property, without possession 
taken of it, would be void in equity (as tho 
cases to which I have referred show that it 
would be at law), but that the equitable riglit 
is incomplete and imperfect unless there is 
subsequent possession, or some act equiva- 
lent to it to perfect the title. 

In considering the case it will be unneces- 
sary to examine the authorities cited in ar- 
gument, to show that if there is an agree- 
ment to transfer or to charge future acquired 
property, the property passes, or becomes 
liable to the charge in equity, where the ques- 
tion has arisen between tho parties to the 
agreement themselves. In order to determine 
whether the equity which is created under 
agreements of this kind is a personal equity 
to be enforced by suit, or to be made avail- 
able by some act to be done between the par- 
ties, or is in the nature of a trust attaching 
upon and binding the property at the instant 
of its coming into existence, we must look 
to cases where the rights of tlie third persons 
Intervene. 

Tho respondents, in support of the decree, 
relied strongly on what was laid down by 
Baron Parke in Mogg v. Baker, 3 Mees. & 
W. 10."), 198, as the rule in equity which he 
stated he had dei'ived from a very high au- 
thority, "that if tho agi'cement was to mort- 
gage certain specific fmniture, of whicli tlie 
corpus was ascertained, tliat would constitute 
an equitable title in the defendant, so as to 
prevent it passing to the assignees of the in- 
solvent, and tlien the assignment would make 
that equitable title a legal one; but if it was 
only an agreement to mortgage fm-niture to 
be subsequently acquired, or" (the word "or" 
Is omitted in the report) "to give a bill of 
salo at a future day of the furniture and oth- 
er goods of the insolvent, then it would cover 
no specific fm-iiitore. and would confer no 
right in equity." The meaning of these latter 
words must be that tliere would be no com- 
plete equitable transfer of tlie property, be- 
cause there can be no doubt that the agrce- 
nient staleil would create a rigid in ecpiity 
upon which the party entitled might lile a 
bill for speclllc performance. 

Tills point is so clear that It Is almost un- 
necessary to refer to the observations of Ixird 
Elilon In the case of Tlie \V;irre, S Price, 2i'.!t, 
n. In supjiort of It. It must also be observed, 
that the iiropositiim In Mogg v. Baker hard- 
ly reaches tho i>resent question, because It Is 
not staled as a case of an actual liiinsfer of 
future property, but jis an agreement to mort- 
gage, or to give a bill of sale at a future 
day. The only e<pilty which could belong to 
a party under such an agreement would be 
to have a morlgnge or a bill of sale of the 
fntiirn pri)i><>rly executed to lilm. Tt does not 
meet a ease like the pi'eseiit. where It Is ex- 
piesKly provided that all additional or subsli- 



rOUMATION OF THE CONTRACT— ESSENTIALS. 



77 



tutcd macliinery shall be subject to tbe sniuo 
trusts as are declared of the existing machiu- 
ery. 

Under a covenant of this description to bold 
that that trust attnclics upon the new ma- 
chinery as soon as it is placed in the mill, is 
to give an effect to the deed in perfect con- 
formity with the intention of the parties, and 
as, by the terms of the deed, Taylor was to 
remain in possession, the act of placing the 
machinery in the mill would appear to be an 
act binding his conscience to the agreed trust 
on behalf of the appellants, and nothing more 
would appear to be requisite, unless by the 
established doctrine of a court of equity 
some further act was indispensable to com- 
plete their equitable title. 

The judgment of Lord Campbell, resting, 
as he states, upon Lord Bacon's maxim, de- 
termines that some subsequent act is nec- 
essary to enable "the equitable interest to 
prevail against a legal interest made subse- 
quently bona fide acquired." It is agreed 
that this maxim relates only to the acquisi- 
tion of a legal title to future property. It 
can be extended to equitable rights and in- 
terests (if at all) merely by analogy; but in 
thus proposing to enlarge the sphere of the 
rvile, it appeai-s to me that sufficient attention 
has not been paid to the different effect and 
operation of agreements relating to futiu-e 
property at law and in equity. At law, prop- 
erty, non-existing, but to be acquired at a 
future time, is not assignable; in equity it 
is so. At law (as we have seen), although 
a power is given in the deed of assignment 
to take possession of after-acquired property, 
no interest is transferred, even as between 
the parties themselves, unless possession is 
actually taken; in equity it is not disputed 
that the moment the property comes into ex- 
istence the agreement operates upon it. 

No case has been mentioned in which it 
has been held that upon an agreement of this 
kind the beneficial interest does not pass in 
equity to a mortgagee or purchaser immedi- 
ately upon the acquisition of the property, 
except that of Langton v. Horton, 1 Hare, 
549, which was relied upon by the respond- 
ents as a conclusive authority in their favour. 
I need not say that I examine every judg- 
ment of that able and careful judge Vice 
Chancellor Wigram with the deference due to 
such a highly respected authority. Langton 
V. Horton was the case of a ship, her tackle 
and appurtenances, and all oil, head matter, 
and other cargo which might be caught aud 
brought home. The vice chancellor decided, 
in the first place, that as against the assignor 
there was a valid assignment in equity of the 
future cargo. But the question arising be- 
tween the mortgagees and a judgment cred- 
itor, who had afterwards sued out a writ of 
fl. fa., his honour, assuming that the equi- 
table title which was good against the assign- 
or would not, under the circumstances of the 
case, bo available against tlie judgment cred- 
itor, proceeded to consider whether enough 



had been done to perfect the title of the 
mortgagees, and ultimately decided in their 
favour upon the acts done by them to obtain 
lJo.ssessiou of the cargo. 

It was said upon the first argument of this 
case by the counsel for the appellants that 
the judgment of the vice chancellor was, 
upon this occasion, fettered by his deference 
to the opinion apparently entertained and 
expressed by Lord Cottenham in the case 
of Whitworth v. Gaugain, 1 Phil. Ch. 728. 
It will be necessary, therefore, to direct at- 
tention for a short time to that case, and 
especially as it has an immediate bearing 
upon the present occasion. The case, as 
originally presented before Lord Cottenham, 
was an appeal from an order of the vice 
chancellor of England appointing a receiv- 
er. The bill of the equitable mortgagees 
was founded entirely upon alleged fraud 
and collusion between the mortgagor and 
the tenants by elegit. The defendants bad 
denied fraud and collusion, and also notice 
of the mortgagee's title at the time of ob- 
taining possession under the elegits. The 
plaintiffs, in argument, attempted to set up 
a case not made by their bill, viz. that in- 
dependently of the question of fraud, they 
had by law a preferable title to the defend- 
ants. The lord chancellor discharged the 
order for a receiver solely on the ground 
that the plaintil3:s had failed in making out 
the case on which they asked for the inter- 
ference of the court. Upon discharging the 
order. Lord Cottenham is reported to have 
said that in the argument a totally different 
turn was given, or attempted to be given. 
to the plaintiffs' case; viz.. that, independ- 
ently of the question of fraud, they had 
by law a preferable title to the defendants.' 
"If," he added, "the bill had been framed 
with that view, and the claim of the plain- 
tiffs founded on that supposed equity, I 
should have required a great deal more to 
satisfy me of the validity of that equity be- 
fore I could have interposed by interlocu- 
tory order, because I find these defendants 
in possession of a legal title, although not 
to all intents and purposes an estate, yet a 
right and interest in the land which under 
the authority of an act of parliament they 
had a right to hold, the elegit being the 
creature of the act of parliament, and, there- 
fore, they have a parliamentary title to hold 
the land as against all persons, unless an 
equitable case can be made out to induce 
this court to interfere," Although Vice 
Chancellor Wigram, in Langton v. Horton, 
1 Hare, 549, in adverting to this language, 
said that he thought Lord Cottenham in- 
tended only what his words literally ex- 
pressed, that he would not interfere against 
the judgment creditor by an interlocutory 
order unless he was well satisfied of the 
validity of the equity to which he was call- 
ed upon to give summary effect, yet it is 
impossible to doubt (to use the expression of 
his honour) "that the strong leaning of Lord 



78 



SALES. 



Cottouhaiu's nnind" was in favour of the 
lesal liuht of the judirment creditor over the 
equitable title of the luortwisees. 

This opinion, though merely expressed in- 
cidentally, would be entitled to the greatest 
weight upon the present question, if the 
law had not been since settled in opposition 
to it. For in consequence of the ground 
upon which Lord Cottenham discharged the 
order for a receiver, the plaintiffs amended 
their bill, and inserted a prayer for alterna- 
tive relief, independent of fraud and collu- 
sion; -and the cause having been brought 
on for hearing before A"iee Chancellor Wi- 
gram, his honour decided that the mortga- 
gees were entitled in equity to enforce their 
charge in priority to the judgment creditors 
of the mortgagor, although they had no no- 
tice of the equitable mortgage, and had ob- ! 
tained actual possession of the land by writ ! 
of elegit and attornment of the tenants. j 

This decision was afterwards affirmed by i 
Lord Lyndhurst. who in the course of his [ 
judgment mentioned the case of Abbott v. | 
Straiten. 3 Jones & L. 003; where Sir Ed- 
ward Sugden, then lord chancellor of Ire- I 
land, had determined that an equitable mort- '• 
gagee was entitled to priority over a subsc- i 
quent creditor by judgment, who was in j 
possession by a receiver, and who had no I 
notice of the mortgage; and refcrrring to | 
Whitworth v. Gaugain expressed his agree- 
ment with the conclusion to which Vice 
Chancellor 'Wigram (3 Hare, 41G) had come 
in that case, and stated that "he had repeat- 
edly acted on the rule thai an agreement 
binding property for valuable consideration, 
though equitable only, will take ))rccedonoe 
of a subsequent judgment, whatever may 
be the consideration for It, and whether it 
be obtained In invituni or by confession." 

■\Vhatover doubts, therefore, may have 
been formerly enlertalned upon the subject, 
the right of priority of an eiiullalile mort- 
gagee over a judgment creditor, though 
without notice, may now be considered to be 
llrnily established; and, according to the 
opinion of Ijord St. Ix^onards, "any agree- 
ment liliidlng property for valuable consld- 
oratlon" will confer a similar right. 

It docs not nppc.'ir from this review of the 
cane of Wlillworth v. Caugalii that It could 
have had any liilliience over the qiicRtlou in 
Langton v. llorton, as to the Imperfei-tlon 
of the morlgngee'H title, unlcsn something 
had boon ilone to perfect It. The point docs i 
not appear l<i have been at all noticed by I 
Lord Cottonham, his observations having I 
boon oiiiillnod to the oompetillon botwoon the i 
o(|iiltablo tlllo of the mortgagoe and the | 
legal title of the Judgment creditors. Lang- i 
Ion V. Ilnrlon nnist thorofore be accepted 
an nn aiilliorlty Hint tlioro may be cases In ' 
which nn eipiltalilo niorlgagoe's title may 
lie Inniniploto ngHlnst a suliHoquont Judg- 
ment croilltor. In Hint <aHo the delivery of 
poHMoNslon of the cnrgo <in bonrd the vossol 
wna, na ttic vice clianccUur fiald, "Impossl- | 



ble. as the vessel was at sea. The parties 
could do nothing more in this coimtry with 
reference to it than execute an instrument 
purporting to assign such interest as Birnie 
(the mortgagor) had, send a notice of tlie 
assignment to the master of the ship, and 
await the arrival of the ship and cargo. 
This was the course taken; and on the ar- 
rival of the ship at the port of London the 
plaintiffs immediately demanded posses- 
sion." The cargo was, in point of fact, in 
possession of the captain, as the agent for 
the owner, the mortgagor. It would have 
been rather a strange effect to give to the as- 
signment of the future cargo to hold that 
when it came into existence a trust attached 
upon it for the benefit of tlie mortgagee, that 
thereupon the captain became his agent, and 
that the mortgagee thereby acquired a per- 
fect e(iuitab!e right to the property, which 
was valid against all subsequent legal claim- 
ants. r,angton v. Horton may have been 
rightly decided as to the necessity for the 
completion of the mortgagee's title uuder. 
the circumstances which there existed, and 
yet it will be no authority for saying that 
in every case of an equitable mortgage of 
future property something beyond the exe- 
cution of the deed and the coming into exist- 
ence of the property will be necessary. 

It certainly appears to be putting too great 
a stress upon this case to urge it as an au- 
thority that an equitable title would have 
beeu defective If certain circumstances had 
not existed, when the existence of those cir- 
cumstances was established in proof and 
made the ground of the decision. 

But if it shotdd still be thought that the 
decHl, together with the act of bringing the 
machinery on the premises, was not sufli- 
clent to complete the mortgagee's title, it 
may be asked what more could have been 
done for this purpose? The trustee could not 
take possession of the new machinery, for 
that would have been coutrary to the provi- 
sions of the deed under whicJi Taylor was to 
remain In possession until default in payment 
of the mortgage money after a demand in 
writing, or until interest should have become 
In nrrear for three months; and in either of 
these events a power of sale of the machin- 
ery might be exercised. And If the intor- 
venlent act to perfect the title In trust be 
oi\e proceeding from the mortgagor, what 
stronger one could be done by him than the 
llxing and placing the new machinery in the 
mill, by which II became, to his knowledge. 
Inimedialoly sidiject to the operation of the 
deed '/ 

I asked Mr. Aniplilclt, upon the second nr 
gimicnl, what novus actus he contended Im 
be nocossary, and he replied "a new deed." 
But this would be Inconsistent with the 
terms of the original deinl, whii'h embraces 
the sniislltuteil mnchlncrj-, and which certain- 
ly was npciatlve upon the futtn-o property ;is 
bolwoeu the pailles themselves. And It 
H(!eniB to be neither a convenient nor a rca- 



FOlt.MATlU.N UF TUE CONTKACT— ESSENTIALS. 



79 



soiiable view of the rights acquired under 
the deed to bold tliat for auy separate article 
Iwougbt upon the mill a new deed was neces- 
sary, not to transfer it to the mortgagee, but 
:to protect it against the legal claims of third 
ipersous. 

P.ut if something was still requisite to be 
done, and that by the mortgagor, I cannot 
help thinking that the account delivered by 
Taylor to the mortgagees of the old machin- 
ery sold, and of the new machinery which 
was added and substituted, was a sufficient 
uovus actus interveniens, amounting to a dec- 
laration that Taylor held the new machinery 
upon the trusts of the deed. 

Lord ^YE^"S ,EYDALE. My noble and 
learned friend will forgive me, but that was 
not mentioned in the bill. 

Lord CHELMSFORD. My noble and learn- 
ed friend is quite correct in that; it must 
be taken that that was not mentioned in 
tlie bill, and that was the answer given when 
I urged, in the course of the argument, that 
that account must be taken to be a sufficient 
actus. But still I am stating what my views 
are of the whole case. I think that the ac- 
cuimt delivered by Taylor to the mortgagees 
of the whole machinery which was added 
and substituted, was a sufficient novus actus 
interveniens, amounting to a declaration that 
Taylor held the new machinery upon the 
trusts of the deed, the only act which could 
be done by him in conformity with it; and 
it is difficult to understand for what other | 
reason such an account should have been ren- 
dered. As between themselves, it is quite 
clear that a new deed of the added and sub- 
stituted machinery was mmecessary. No 
possession could be delivered of it, because 
it would have been inconsistent with the 
agreement of the parties; and anything, 
therefore, beyond this recognition of the 
mortgagee's right, appears to be excluded by 
the nature of the transaction. 

I will add a very few words on the subject 
of the notice of the claim of the mortgagees 
to the judgment creditor. I think that the 
equitable title would prevail even if the judg- 
ment creditor had no notice of it, according 
to the authorities which have been already 
observed upon. It is true that Lord Cotten- 
ham, in the case of Metcalfe v. Archbishop 
of York, 1 Mylne & C. 547, 553, said that if 
the plaintiff, in that case, was entitled to the 
charge upon the vicarage under the covenant 
and charge in the deed of ISll, "then, as the 
defendants had notice of that deed before 
they obtained their judgment, such charge 
must be preferred to that judgment." This 
appears to imply that his opinion was that 
if the judgment creditor had not had notice, 
he would have been entitled to priority. 
Much stress, however, ought not to be laid 
upon an .ncidental observation of this kind, 
where notice had actually been given, and 



wliere, therefore, the case was deprived of 
any such argument in favour of the judgment 
creditor. If Lord Cotti^nhani really meant 
to say that notice, by the judgment creditor 
of the prior equitable title was necessary in 
order to render it available against him, his 
opinion is opposed to the decisions which 
have established that a judgment creditor, 
with or without notice, must take the prop- 
erty, subject to eveiy liability under which 
the debtor held it. 

The present case, however, meets any pos- 
sible difficulty upon the subject of notice, be- 
cause it appears that the deed was registered 
as a bill of sale, imder the provisions of the 
17 & IS Vict. c. 36. It was argued that this 
act was intended to apply to bills of sale of 
actual existing property only, and it probably 
may be the case that sales of future proper- 
ty were not within the contemplation of the 
legislattu-e, but there is no ground for ex- 
cluding them from the provisions of the act; 
and upon the question of notice, the register 
would furnish the same information of the 
dealing with future as with existing propeity, 
which is all that is required to answer the 
objection. 

I think that the late lord chancellor was 
.right in holding that, if actual possession of 
the machinery in question before the sher- 
iff's officer entered was necessary, there was 
no proof of such possession having been tak- 
en on behalf of the mortgagee. But upon a 
careful consideration of the whole case, I 
am compelled to differ with him upon the 
ground on which he ultimately reversed Vice 
Chancellor Stuart's decree. I think, there- 
fore, that his decree should be reversed, and 
that of the vice chancellor affirmed. 

Mr. Malins asked the direction of the house 
as to costs. The vice chancellor gave the 
costs of the sheriff below. Your lordships 
have given the respondents the costs of the 
petition of appeal to the court below. I un- 
derstand your lordships to confirm tlie decree 
of the vice chancellor. That would include 
the costs of the sheriff as well as the costs 
of the respondents. 

THE LORD CHANCELLOR. There can 
be no costs of this appeal. The petition of 
rehearing to the court below is dismissed 
with costs; therefore all persons affected by 
that petition of reheaiing wUl get their costs 
below. 

The following order was afterwards enter- 
ed on the journals: "That the decree or de- 
cretal order of the court of chancery of the 
22d of December, 1S60, be reversed; and 
that the petition for rehearing, presented by 
the said respondent, Emil Preller, to the lord 
high chancellor, be dismissed, with costs; 
and that the cause be remitted back to the 
court of chancery, to do therein as shall be 
just, and consistent with this judgment." 
Lords' Journals, 4th August, 1S62. 



tJO 



SALES. 



McCOXXELL V. HUGHES. 

(29 Wis. 537.) 

Supreme Court of Wisconsin. Jan. Term, 1872. 

Appeal from circuit court. Green Lake 
county. 

Ryan & Kimball, for appellant. A. B. 
Hamilton and Butler & Winkler, for re- 
spondent 

LYON, J. The bill of exoeptions does not 
purport to contain all of the evidence. 

We cannot, therefore, review the evidence, 
but must presume that it sustains the find- 
ings of fact by the circuit court. That 
court having found that the material alle- 
gations of the complaint were proved, it fol- 
lows that if the complaint states a valid 
cause of action, the plaintiff was entitled to 
judgment. 

We think that the complaint does state a 
valid cause of action. It avers that an ex- 
ecutory contract for the sale and purchase of 
wheat was made by the parties, and that, 
in pursuance thereof, the plaintiff delivered 
to the defendants, and the defendants ac- 
cepted and received the wheat. It must be 
true that by such delivery and aoccplauce 
the title to the wheat became vested in the 
defendants, and the right to have the price 
therefor, when the same should be deter- 
mined as provided in the contract, in like 
manner became vested in the plaintiff. 

But it is urged on behalf of the defendants 
that the transaction was Invalid as a sale, 
because the contract did not limit the plain- 
tiff to the selection of any particular day, or 
of a day within a specified lime, on which 
the market price of wheat in .Milwaukee 
should control the i)rice of the wlieat In 
ipiestion, but left him the option to select 
any day in the future for the purpose of 
fixing the price. 

The contract furnishes a criterion for as- 
certaining the price of wheat; leaving noth- 



ing in relation thereto for further negotia- 
tion between the parties. This is all that 
the law requires. Story, Sales, § 220. No 
case has beeu cited, and we are unable to 
find one. which holds that it is essential to 
the validity of a sale in such cases that the 
criterion agreed upon should, by the terms 
of the contract of sale, be applied, and the 
price thereby determined, on any specified 
day or within a specified time. Judge Story, 
in the section of his treatise above cited, ev- 
idently does not intend to lay down any 
such rule. It may be that, if plaintiff had 
delayed unreasonably to make such selec- 
tion after being requested to make the 
same, he might be compelled to do so. But 
we do not decide this point. 

It is further argued that, after a valid 
sale and Vtefore payment of the price, there 
must be a debt owing by the vendee to the 
vendor, while in this case, until the price of 
the wheat was ascertained, there was no 
indebtedness. The latter part of this prop- 
osition is erroneous. As soon as the wheat 
was delivered, the defendants owed the 
plaintiff therefor. There was therefore a 
debt, but the amount thereof was not ascer- 
tained. ■ It remained unliquidated until the 
price of the wheat was determined. 

The objections that the assessor could not 
list the claim for the price of the wheat for 
taxation, and that the same could not be 
reached by garnishee process at the suit of 
a creditor of the plaintiff, while such price 
remained undetermined, present no practical 
difficulties. The assessor would fix the 
value of the demand according to his best 
judgment as in other cases of the valuation 
of property and credits; and the creditor in 
the garnishee proceeding would probably be 
subrogated to the rights of the plaintiff in 
respect to determining the contract price 
for the wheat 

BY THE COURT. The judgment of the 
circuit court Is affirmed. 



FORMATION OF THE CONTUACT— E.SSEJ^TI ALS. 



81 



LYON et al. v. CULBERTSON et al. 

(S3 Ul. 33.) 

Supreme Court of Illinois. Sept. Term, 1876. 

Appeal from superior court, Cook county. 

Leonard Sweet and John J. Herrick, for 
appellants. Dent & Black, for appellees. 

WALKER, J. We learn from tbis record 
:bat appellees, as partners in the firm of 
Oulbertson, Blair & Co., brought suit 
against appellants, also partners, doing 
business under the name of J. B. Lyon & 
Co., to recover damages for au alleged fail- 
ure to perform contracts for the purchase 
of a quantity of wheat. There were several 
contracts, alike iu their terms, except as 
rto amounts and dates, and they were sigu- 
3d by different persons. This is a copy of 
Bne of them: 

"Chicago, August 14, 1872. We have this 
day bought of Culbertson, Blair & Co. 10,- 
000 bushels of No. 2 spring wheat, in store, 
at $1.57% per bushel, to be delivered, at 
sellers' option, during August, 1872. This 
contract is subject, in all respects, to the 
irules and regulations of the board of trade 
of the city of Chicago. J. B. Lyon & Co. 
tC." 

The rules and regulations referred to are 
embraced in — 

"Rule IX. Margins on Time Contracts. 

"Section 1. On all time contracts, made 
between members of the association, de- 
iposits for security and margin may be de- 
manded by either or both parties; said 
imargln not to exceed ten (10) per cent, on 
the value of the property bought or sold 
on the day it is demanded. All such de- 
iposits to be made with the treasurer of the 
association, unless otherwise agi'eed upon 
iby the parties. Said deposits and margins 
may be demanded on and after the date 
of contract, and from time to time, as may 
he necessary to fully protect the party call- 
ing for the same. When margins are de- 
manded, the party called upon shall be 
entitled to deduct from the margin called 
any difference there may be in his favor 
between the market price and the con- 
1 tract price of the property bought or sold. 
Any deposit made to equalize the contract 
price with the market price shall be con- 
sidered as a deposit for security, and not 
margin. 

"Sec. 2. Should the party called upon, as 
herein provided for, fail to respond within 
the next banking hour, it shall thereafter 
be optional with the party making such 
call, by giving notice to the delinquent, to 
consider the contract filled at the market 
value of the article at the time of giv- 
ing such notice; and all differences be- 
tween said market value and the contract 
price shall be settled the same as though 
the time of said contract had fully expired: 

GUIF.PERS.PROP. — 6 



provided, however, that, when the call is 
made during the general meeting of the 
board between 11 a. m. and 1 p. m., the 
deposit shall be made before 2 o'clock of 
the same day." 

Under these contracts, deposits and mar- 
gins were put up by the parties in con- 
formity to the rules, from time to time. 
On the 19th day of August, 1872, the mar- 
ket for No. 2 spring wheat opened at from 
$1.55 to $1.57, and declined during the day, 
closing, after exchange hours, at from $1.44 
to as low as $1.38. On the 20th the mar- 
ket opened at from $1.27 to $1.31, and fell 
rapidly during business hours. Between 11 
and 1 o'clock, it was as low as $1.10 to 
$1.11 per bushel. It is claimed that on the 
morning of the 20th appellees became en- 
titled to further deposits, and thereupon, 
by written notice sent to the office of the 
buyers, demand was made of Lyon & Co. 
for further margins, but, failing to respond 
to the demand within the next banking 
hour, Culbertson, Blair & Co. elected, un- 
der the rules, to consider the contracts fill- 
ed, and charged to account of Lyon & Co. 
the difference between the purchase price 
and $1.11%, and notified appellants there- 
of. This difference is the matter in dis- 
pute between the parties. On a trial in the 
court below, the jury found for plaintiffs 
the difference as claimed. A motion for a 
new trial was overruled, and judgment ren- 
dered on the finding, and this appeal Is 
brought by defendants. 

The contract signed by Anderson has been 
adjusted, and hence it is not necessary to 
be considered; but the contracts signed by 
Templeton, as the purchaser, were admitted 
in evidence, against the objections of ap- 
pellants. The court excluded evidence of- 
fered by appellees to show a usage among 
the members of the boai;d of trade to de- 
mand of the broker the name of his prin- 
cipal at the time of the purchase, and, 
failing to do so, it was regarded as an 
election by the seller to look alone to the 
agent for a fulfillment of the contract. 
The proper foundation for the introduction 
of this evidence was laid. Inasmuch as the 
great mass of commercial business is trans- 
acted by men pressed by their affairs, and 
who are not in the habit, even if time wouM 
permit, of reducing their agreements to 
writing beyond a mere memorandum, the 
courts are compelled to look to the usages 
of trade or business to learn the real In- 
tention of the parties. If proof of such 
usages was not allowed, it is believed that 
in a large number, if not the greater por- 
tion, of commercial transactions, the in- 
tention of the parties would be defeated, 
instead of being enforced, when differences 
should occur between them. Where there 
is a well-known usage which obtains in 
trade, it must be presumed that all who 
are engaged in that business, where it iire- 
vails, contract with a view to it, unless 



S2 



SALES. 



they exclude the presumption by their con- 
tract Hence it has been repeatedly held 
by this court that a usage may be proved 
to interpret the otherwise indeterminate in- 
tention of the parties, and to ascertain the 
nature and extent of their contracts, not 
from their express stipulations, but from 
mere implication and presumptions, and 
acts of doubtful or equivocal character; but, 
to have commercial usage take the place 
of general law, it must be so uuiforinly 
acquiesced in for such a length of tiuie ; 
that the jury will feel themselves constrain- ; 
eU to find that it entered into the minds : 
of the parties, and formed a part of the ! 
contract. Dixon v. Dunham, 14 HI. 324; - 
Crawford v. Clark, 15 111. 5G1; SIuuu v. ' 
Burch, 25 111. 35; Fay v. Strawn, 32 111. j 
295; Deshler v. Beers, Id. 368; Insurance 
Co. V. Favorite, 4U 111. 203; Turner v. Daw- 
son, 50 111. S5. Other cases might be cited 
in illustration of the rule, were not those ! 
referred to amply sulhcient for the purpose. 

Were it not for the terms and conditions 
of the contracts as expressed in the rules 
of the board of trade, the case would be 
exceedingly simple, and free from all diffi- 
cultj'. We presume all persons in the pro- 
fession know that when, on the face of 
these agreements, the delivery of the wue.it 
and the payment of the money were con- 
current acts, to be performed by the par- 
ties at one and the same time, neither par- 
ty could put tlie other in default without 
performing his part of the agreement, or 
offering to perform it. Had the time elaps- 
ed for performance, all know that appellees 
would have been compelled to tender the 
wheat, and appellants to have refused to 
receive and pa.v for it, before the former 
could have sued and recovered. 2 Pars. 
Cont. p. 189; 1 Chit. I'l. 351. This is lllus- 
trnted by every well-prepared preced.>nl of 
a declaration on such contracts, whatever may 
be the form of action. 

But, the parties having iucoriKiratoit the 
rules of the board of trade into their agree- 
ment, the (juestion arises as to its olTect on 
the contract. It in terms provides that, when 
either i)arty shall be In default in pulling up 
margins, after notice, and within the next 
banking hour, the parly caliiiig for them shall 
tliereu|Kin liave the right to consider tlie con- 
tract lilled at the market value nt the time 
of giving such notice, and all dlfri-rcnces be- 
tween such market value and the contract 
prlci' shall be settled the same as tho\igh the 
time for rultliling the contract had fully ex- 
plreil. This, In terms, does not recpiire an 
olTcr, or nn ability or willingness, to perform 
on elllier [inrt. It only. In terniH, roquiros a 
mental operation, uiiaccom|ianieil with any 
physical act. Until the expirnllcm of the hoiu', 
anil for a juTiod nt time aftiTW.'irds, the parly 
claiming a defanll hns, by the lerins nf the 
rule, the option to conHlder the contnict Illled 
or not, as he niiiy choose. Ilnd the agreement 
required llie piiily, before he exerclseil llie 



option, to have an offer, or at least have 
shown that he had the abiUty, to fulfill his 
part of the agreement, and was willing to 
do so, then the contract would have conform- 
ed to legal principles; but, under the tei-ms 
of this contract, appellees were not required 
to have a bushel of grain they could have de- 
livered at the place of performance. It is 
true, the contract speaks of wheat "in store," 
but neither wheat nor warehouse receipts were 
offered, nor was it shown that appellees had 
; any wheat in Chicago, and it could not have 
; been in the contemplation of the iJarties to 
: deliver or receive it elsewhere, or it would 
! have been so stated in the contract. The use 
; of the words "in store" we understand to 
mean that it was, at the time of delivery, to 
j be in store in Chicago. The fact that no 
wheat was offered or demanded, shows, we 
think, that neither party expected the deliv- 
ery of any wheat, but, in case of default in 
keeping margins good, or even at the time for 
dehvery, they only expected to settle the con- 
tract on the basis of differences, without ei- 
ther performing or offering to perform his part 
of the agreement; and, if this was the agree- 
ment, it was only gaming on the price of 
wheat, and, if such gambling transjtctions 
shall be permitted, it must eventually lead \o 
Avhat are called "corners," wliich engulf iuin- 
dreds in utter ruin, derange and unsettle 
prices, and operate injuriously on the fair and 
legitimate trader in grain, as well as the 
producer, and are pernicious, and highly de- 
moralizing to the trade. A contract to he 
thus settled is no more than a bet on the 
l)rice of grain during or iit the end of a limited 
period. If the one parly is not to deliver or 
the other to receive the grain, it is, in all but 
name, a gambling on the price of the com- 
modity; and the change of names never chan- 
ges the quality or nature of things. It has 
never been the policy of tlie law to encom'age. 
or even sanction, gaming transactions, or sucli 
as are injurious to trade, or are immoral in 
their tendency; and the old maxim that courts 
will always suiipress new and sulilile inven- 
tions in derogation of the common law 
(Branch's I'rincipia, 71) would be applicable 
to sucli contracts. This seems to l)e a sublile 
Invention to abrogate well-established, fair, 
and just principles of the law of contracts, 
and not only .so, but to the great injury of fair 
and legitimate trade. Here there was suiren- 
dered to appellees the deposit of .f2,:>(U>, and 
tlie j\n\v have found a verdict of ;f5,7t)0, mak- 
ing in all .fS,0(X) for coinpensalion for damages 
Kuslaiiied, when, so far as the evidence shows, 
ai>pellccs had no wheat they could have deUv- 
ered in fulllllinent of the contract, nor does It 
appear Ihat Ihey ever expected to deliver a 
bushel uiiilei- this con tract. They do not show 
that lliey have lost a dime, or tliat they are 
lialile to lose anything, under this contract. 
Why, then, say appi'llecs shnuld recover this 
large sum? All know that It 1b a fundamental 
rule that a parly canimt recover more than 
a compensation ciimmI Id his loss by any In- 



FORMATION OP THE CONTKACT— ESSENTIALS. 



85 



jury he may have sustained, except where 
Iiunitive damages are given. There is no 
evidence tliat appellees had contracted for the 
wheat necessary to fill this contract, or had 
incurred the least expense towards its per- 
formance. Then why allow them to recover 
(Ills large sum of money V We know of no 
principle of justice that requires it more than 
that of any debt incurred without considera- 
tion to support it. It is ti'ue that appellees 
had put up their margins, and if, at the end 
of the time stipulated, the market had been 
against them, or if that had been the case be- 
fore that time, and they had been in default, 
they would have lost it. The statute has pro- 
hibited, under heavy penalties, the sale of 
wheat on called options to buy or sell grain, 
because of its pernicious tendency; but it 
seems to us that these contracts for the sale 
of grain, where neither pa.ity intends to per- 
form them, but simply to cancel them before 
or at their maturity, and pay differences, are 
as injurious to trade and fully as immoral as 
are the sales of options. Neither belongs to 
fair and legitimate trade. 

It is claimed this wheat was again sold to 
ascertain the differences that should be paid. 
What wheat? it may be asked. There is no 
evidence that appellees had any wheat that 
could be delivered at the place of this contract. 
So far as we can see, the wheat only exist- 
ed in imagination; and even this imaginary 
wheat may have already been sold a number 
of times before the imaginary fulfillment of 
the contract, which it is claimed put appel- 
lants in default. If the contract was for an 
actual sale,— a delivery of the grain by ware- 
house receipts or otherwise, — it would have 
been necessary to offer to perform, or at least 
shown a readiness to perform, to have placed 
appellants in default; and then the difference 
between the selling price and the contract 
price would have been the fair measure of 
(la mages. 

Whilst the law has studiously fostered fair 
and legitimate trade, it has not sanctioned 
pernicious practices that are Injurious to its 
votaries, and are demoralizing in their tend- 
encies. Nor can it change the rule that the 
contract may have been made in good faith, 
with an honest expectation that the w-heat 
would be delivered, and the money paid there- 
for, as the law is equally imperative that an 
offer, or at least a readiness, to perform must 
lie shown by the party seeking to put the 
other in default. But when they, by the 
agreement, dispense with a performance, or 
at least an offer or readiness to i^erform, then 
they render the contract obnoxious to the law 
of contracts. Pickering v. Cease, 79 111. 328. 
It is this effort which stamps it as being in 
Uip nature of a gaming contract. It is tliis 
effort which characterizes the transaction, and 
renders it illegal. 

We are aware that there are cases which 
hold that a party may be excused, by the 
default of the other in the performance of 
a precedent act, from proving an offer or a 



readiness to perform on his part, before de- 
claring the contract at an end. Nor is it 
claime<l that, when appellants failed to put 
up further mai'gins, appellees might not have 
rescinded the contract by notifying appel- 
lants that it was at an end. The contract, 
on its face, was for the sale and delivery of 
wheat at a specified price, within a given 
time; and there was a further agreement 
contained in the rules of the board of trade 
that the parties would put up margins, each 
to secure the other in the performance of 
the contract. Then, when this hitter agree- 
ment was not performed by appellants, what 
resulted as a legal consequence? Why, man- 
ifestly, the damage only resulting from a 
failure to comply with its requirement. It 
was not for a failure to receive the grain on 
an offer or a readiness to deliver. And in 
such a case, what may be recovered? Sure- 
ly nothing more than the damages sustained 
by appellees. And what were the damages 
sustained? The proof shows they were 
nothing, as appellees had no wheat that 
could be delivered in fulfillment of the con- 
tract. An agreement to perform several acts 
at different times does not authorise a party 
to recover for a breach of all because the 
other party has refused to perform the first 
in the series. Suppose an owner of a lot of 
ground were to contract with a builder to 
furnish all the materials and labor, and con- 
struct for him a house on the lot; and sup- 
pose the agreement provided that the build- 
er should commence the work at once, and 
complete the stracture within 12 months, 
and the owner was bound to pay therefor 
$20,000, in equal monthly installments: and 
the builder should enter upon the perform- 
ance of the contract, and expend .?l.t)tX) in 
materials and labor; and the owner should 
make default in the payment of the first in- 
stallment. Does any one suppose that the 
builder could, even if the agreement so pro- 
vided, treat the contract as filled by him, and 
sue for and recover the $20,(X)0? We appre- 
hend that no one would contend that he 
could. Again, suppose there should be add- 
ed to such an agreement a provision that, if 
the builder should make default, the owner 
might treat the contract as fully performed 
by him, does any one imagine, on the default 
of the builder, that the owner could sue for 
and recover of the builder as though he had 
paid him in advance the ?20,000, although 
he had not paid a dollar on the contract? 
We presume no one could say it would be 
legal or just to permit such a recovery. Or 
suppose in such a contract it should be 
agreed that the builder should furnish the 
materials, for which the owner should pay 
him, and, if the owner should make default, 
that he should pay for all increase in their 
value, and suppose that from some sudden 
and unexpected emergency, building mate- 
rials should advance 50 per cent., would any 
one suppose that he could, on the default of 
the owner, sue him, ana recover the rise In 



84 



SALES. 



their value,— we will suppose $5,000 or $6,000, 
— when he did uot have on hand any such 
material, and had contracted for none, nor 
expended anything therefor? We apprehend 
that all fair-minded men would say it would 
be unjust and oppressive in the extreme. 

In the cases supposed, such has never been 
held to be the measure of recovery, and it 
seems to be obvious that the parties could 
not contract for such a measure of damages. 
It would shock the sense of justice of all 
right-thinking persons, and such a rule 
would be monstrous. All must concede, in 
the cases supposed, that a recovery for the 
labor already performed and money expend- 
ed, together with such proximate damages 
as the party not in default had actually sus- 
tained, would be the limit of the recovery, 
because that would be the injury sustained. 
Then the recoveiy would not be the sum due 
on the fulfillment of the contract by either 
party, but the amount of damages sustained 
by the breach of the precedent clause of the 
agreement. In the cases supposed, an ac- 
tion could not be maintained on an averment 
that the party not in default had fulfilled his 
part of the contract, although it might have 
stipulated he might treat it as fulfilled; but, 
to recover, the action would be on the bre.Tch 
of the precedent clause of the agreement. 
And this is the extent of the cases which 
hold that on the breach of a precedent clause 
of the agreement by one of the parties the 
other may terminate the contract, and sue 
for and recover damages, without waiting 
for the expiration of the time for the ful- 
fillment of the agreement, or offering or 
showing a readiness to perform his part of 
the contract. And in such case the party 
not in default may recover all damages 
growing out of the breach of the precedent 
part of the agreement, and not to the .sime 
extent that he could had he perfornieil in 
full his part of the agreement, and the otiier 
had not performed his part. 

We fail to perceive any difference in iirin- 
ciple between the supposed cases and llie 
one at bar. It may be tliat, had the dec- 
laration counted alone for a breach of the 
agreement to put up margins, and appel- 
lees had proved that they had sustained 
damage by having wheat on hand to deliver, 
or wheat actually piircliased to be delivered 
on the contract, and on whicli tliey had sus- 
tained loss, the amount of such loss might 
have b('en recovere<l: but no such loss Is 
shown. 

Tliore Is another cli,ss of cases whldi hold 
that the conlrnclliig parties may fix a 
measure of dainagi's wlilcli either shall pay 
who shall make default. But, to bo li-gal. 
the sutii lliiiH ;igrci'd to be paid as llqulil.aled 
damages must be roasoii.'ilile, and not op- 
pressive. If the sum thus fixed la highly 
penal, and unjustly oppressive, courts of 
Justice should never enforce the payment of 
Buch exorbitant hiiius. fViurts must treat 
BUch unjust and oppri'sslve agrecTiients aH 



penalties, and refuse to enforce them. In 
all penal bonds there is a positive agreement 
to pay the sum named if the obligor shall 
fail to perform the annexed condition; and 
yet all know the penalty cannot be collected, 
but only the actual damages sustained by 
the breach of the condition. If the damages 
proved equal the sum named in the bond, the 
recovery may be to that extent; but the re- 
covery is for the damages, and uot the pen- 
alty. In this case the conditions contained 
in the rules of the board of trade, if to be 
enforced as claimed, are highly penal, as Is 
illustrated by the recovery below; so much 
so as not to be enforced. 

Another view may be taken of this con- 
tract. We have seen that, in case of a fail- 
ure to i)ut up margins as required, the party 
demanding them may elect to consider the 
contract as filled, and the settlement shall 
then be based on the ditference between the 
contract price and the market price when 
the default is made. It would by no means 
be a forced construction to say this contract 
means that, when the party elects to regard 
the contract as filled, if he desires to do more 
than to simply declare the contract at an 
end— if he desires to hold the other party 
li.able for damages— he must do all things 
that would have been required of him in 
case the time for the delivery had elapsed. 
Had the time for delivery by one party and 
payment by the otlier arrived, by the lerms 
of the contract appellees would, it may be 
held, have been compelled to have tendered 
the wheat or warehou.se receipts before they 
could have put appellants in default, so as 
to recover damages for a breach of contract. 
And tlie agreement gave the sellers the op- 
tion to t\s. the day of delivery, and the right 
thereupon to demand payment, so it should 
be within the period limited by the contract. 
If such was the effect of the terms of this 
contract, then appellees had the right to, and 
were reqiiired to, olTer the grain, whenever 
they electotl to tieat the time as having ar- 
rived for the fullillment of the agreement. 
If they elected, on the 20th of August, to 
treat the time as having arrived, when they 
Would fill the contract, they should have done 
so i)recisely as tliougli the last day had ar- 
rived within which they could make a de- 
livery and demand payment. WItli this con- 
struction, appelliM's were bound to offer the 
wheat or w.'irehouse receipts therefor; and 
hence, they having failed to make such an 
olTer. they have failed to show themselves 
entitled to recover. 

We have exandned willi great care the 
able and exhaustive argument of appi>lleos' 
counsel, filed on a petition for a rehearing, 
but are constrained to adhere to the conchi- 
slon heretofore !innoimced. but have modi- 
fied In some respiK'ts the views heretofoie 
expressed. For the reasons li<>reln expressed, 
the Judgment of the court below must be re- 
verseil, and the cause remanded. Judgment 
reversed. 



FORMATION OF THE CONTRACT— STATUTE OF FRAUDS. 



85 



LEE V. GRIFFIN. 

(1 Best & S. 272.) 

Queen's Bouch. May 9, 1861. 

Declaration against tlie defendant, as the 
executor of one Frances P., for goods bar- 
gained and sold, goods sold and delivered, and 
for work and labor done and materials pro- 
vided by the plaintiff as a surgeon-dentist for 
the said Frances P. 

Plea, that the said Prances P. never was 
indebted as alleged. 

The action was brought to recover the sum 
of £21 for two sets of artificial teeth ordered 
by the deceased. 

At the trial, before Crompton, J., at the sit- 
tings for Middlesex after Michaelmas temi, 
1860, it was proved by the plaintiff that he 
had, in pursuance of an order from the de- 
ceased, prepared a model of her mouth, and 
made two sets of artificial teeth; as soon as 
they were ready he wrote a letter to the de- 
ceased, requesting her to appoint a day when 
he could see her for the purpose of fitting 
them. To this communication the deceased re- 
plied as follows:— 

"My Dear Sir,— I regret, after your kind ef- 
fort to oblige me, my health will prevent my 
taking advantage of the early day. I fear I 
may not be able for some Cays. Yours, &c., 
Frances P." 

Shortly after writing the above letter Fran- 
ces P. died. On these facts the defendant's 
counsel contended that the plaintiff ought to be 
nonsuited, on the ground that there was no 
evidence of a delivery and acceptance of the 
goods by the deceased, nor any memorandum 
in writLug of a contract within the meaning of 
the seventeenth section of the statute of 
frauds (29 Car. II. c. 3), and the learned judge 
was of that opinion. The plaintiff's counsel 
then contended that, on the authority of Clay 
V. Yates, 1 Hurl. & N. 73, the plaintiff could 
recover in tlie action on the coimt for work 
and labor done, and materials provided. The 
learned judge declined to nonsuit, and direct- 
ed a verdict for the amount claimed to be en- 
tered for the plaintiff, with leave to the de- 
fendant to move to enter a nonsuit or verdict. 
In Hilary term following, a rule nisi having 
been obtained accordingly, 

Palchett now shewed cause. Griftlts, in sup- 
port of the rule, was not called upon to argue. 

CROMPTON, J. I think that this rule ought 
to be made absolute. On the second point I 
am of the same opinion as I was at the trial. 
Tliere is not any sufiicient memorandum in 
writing of a contract to satisfy the statute of 
frauds. The case decided in the house of 
lords, to which i-eference has been made dur- 
ing the argument, is clearly distinguishable. 
That case only decided that if a document, 
which is silent as to the particulars of a con- 
tract, refers to auotlier document which con- 
tains sucli particulars, parol evidence is ad- 



missible for the pun)oso of shewing what doc- 
ument is referred to. Assuming, in this case, 
that the two documents wore sufficiently con- 
nected, still there would not be any sufficient 
evidence of the contract. The contract in ques- 
tion was to deliver some particular teeth to be 
made In a particular way, but these letters do 
not refer to any particular bai'gain, nor in 
any manner disclose its terms. 

The main question which arose at the trial 
was, whether the contract in the second count 
could be ti'eated as one for work and labor. 
or whether it was a contract for goods sold 
and delivered. The distinction between these 
two causes of action is sometimes very fine; 
but where the contract is for a chattel to be 
made and delivered it clearly is a contract for 
the sale of goods. There ai'e some cases in 
which the supply of the materials is ancillai-y 
to the contract, as in the case of a printer sup- 
plying the paper on which a book Is printed. 
In such a case an action might perhaps be 
brought for work and labor done and mate- 
rials provided, as it could hardly be said that 
the subject-matter of the contract was the sale 
of a chattel: perhaps it is more in the nature 
of a contract merely to exercise skill and labor. 
Clay V. Yates, 1 Hurl. & N. 73, turned on its 
own peculiar circumstances. I entertain some 
doubt as to the coiTectness of that decision; 
but I certainly do not agree to the proposition 
that the value of the skill and labor, as com- 
pared to that of the material supplied, is a 
criterion by which to decide whether the con- 
tract be for work and labor, or for the sale of 
a chattel. Here, however, the subject-matter 
of the contract was the supply of goods. The 
case bears a strong resemblance to that of a 
tailor supplying a coat, the measurement of 
the mouth and fitting of the teeth being analo- 
gous to the measurement and fitting of the gar- 
ment. 

HILL, J. I am of the same opinion. I think 
that the decision in Clay v. Yates, 1 Hm'l. & 
N. 73, is perfectly right. That was not a case 
in which a party ordered a chattel of another 
which was afterwards to be made and deliv- 
ered, but a case in which the subject-matter 
of the contract was the exercise of skill and 
labor. Wherever a contract is entered into for 
the manufacture of a chattel, there the sub- 
ject-matter of the contract is the sale and de- 
livery of the chattel, and the party supplying 
It cannot recover for work and labor. Atkin- 
son V. Bell, 8 Barn. & C. 277, is, in my opinion, 
good law, with the exception of the dictum of 
Bayley, .1., which is repudiated by Maule, J., 
in Grafton v. Armitage, 2 C. B. 339, where he 
says: "In order to sustain a count for work 
and labor, it is not necessary that the work 
and labor should be performed upon materials 
that are the property of the plaintiff." And 
Tindal, C. J., in his judgment in the same 
rase, page 340, points out that in the applica- 
tion of the observations of Bayley, J., regard 
must be had to the particular facts of the 
case. In every other respect, therefore, the 



fc'6 



SALES. 



case of Atkinson v. Bell, S Barn. & C. 277, is 
law. I tliinli tliat these authorities are a com- 
plete answer to the point taken at the trial on 
behalf of the plamtifif. 

When, however, the facts of this case are 
looked at, I cannot see how, wholly irrespec- 
tive of the question arising under the statute 
of fi-aiuls, this action can be uiaiulaiued. The 
contract entered into by the plaiutitE with the 
deceased was to supply two sets of teeth, 
which were to be made for her and titted to 
her mouth, and then to be paid for. Through 
no default on her part, she having died, they 
never were titted; no action can therefore be 
brought by the plaintiflf. 

BLACKBURX, J. On the second point, I 
am of opinion that the letter is not a sufficient 
memorandum in writing to take the case out of 
the statute of frauds. 

On the other point, the question is whether 
the contract was one for the sale of .moods or 
for work and labor. I think tliat in all cases, 
in order to ascertain whctlier the action ought 
to be brouglit for goods sold and delivered, or 
for worlc and lalKir done and materials pro- 
vided, we must look at the iwrticular contract 
entered into between the parties. If the con- 
tract be such that, when carried out, it would 
result in the sale of a chattel, the party can- 
not sue for work and labor; but if the result 
of the contract is that the party has done work 
and labor which ends in notliing that can be- 
come the subject of a «ilo, the party cannot 
sue for goods sold and delivered. The case of 
afc attorney employed to prepare a deed is an 



Illustration of this latter proposition. It can- 
not be said that the paper and ink he uses 
in the preparation of the deed are goods sold 
and delivered. The case of a printer printing 
a book woiild most probably fall within the 
same category. In Atkinson v. Bell, 8 Barn. 
& C. 277, the contract, if carried out, would 
have resulted in the sale of a chattel. In Graf- 
ton V. Armitage, 2 C. B. 340, Tindal, C. J., 
lays down this vei'.v principle. He draws a 
distinction Ijetween the case of Atkinson v. 
Bell, S Barn. & C. 277, and that before him. 
The reason he gives is that, in the former 
case "the substance of the contract was goods 
to be sold and delivered by the one party to 
the other;" in the latter, "there never was any 
intention to make any thing that could properly 
become the subject of an action for goods sold 
and delivered." I think that distinction recon- 
ciles those two cases, and the decision of Clay 
V. Yates. 1 Hurl. & N. 73, is not inconsistent 
with them. In the present case the contract 
was to deliver a thing which, when completed, 
would have resulted in the sale of a chattel; 
in other words, the substance of the contract 
was for goods sold and delivered. I do not 
think that the test to apply to these cases is 
whether the value of the work exceeds that 
of the materials used in its execution; for, if a 
sculptor were employed to execute a work of 
art. greatly as his skill and labor, supposing it 
to be of the highest description, might exceed 
the value of the marble on wliich he worked, 
the contract would, in my opinion, neverthe- 
less be a contract for the sale of a chattel. 
Rule absolute. 



FORMATION OF TIIK CONTRACT— STATUTE OF FRAUDS. 



87 



COOKE et al. v. MILLARD et al. 

(65 N. 1. 352.) 

Commission of Aiuioals of New Yorlt. 1875. 

Action to recover the price of certaiu lum- 
ber sold and delivered. The referee found 
that plaintiffs were copartners and whole- 
sale lumber merchants, and proprietors of 
a planing mill, at Whitehall, N. i'., and de- 
fendants were partners and lumber mer- 
chants, at New Hamburgh, on the Hudson. 
The course of business is, that the lumber 
is shipped from Whitehall by canal to Troy, 
and thence to New Hamburgh by the Hud- 
son river. On the 5th day of Sept., 18G5, 
the defendants desiring to purchase certain 
kinds of lumber, were shown by the plain- 
tiffs the lumber then in their yard at White- 
hall. This was of the desired quality, but 
needed to be dressed and cut into the dif- 
ferent sizes which they wished. There was 
much more lumber in the yard shown to the 
defendants than was requisite for their pur- 
poses. The defendants thereupon orally 
gave to the plaintiffs an order for certain 
quantities and sizes of lumber, at specified 
prices, amounting in the whole to $918.22. 
A memorandum of the order so agreed to 
was made by the plaintiffs, but was not sub- 
scribed by any one. No particular lumber 
was selected or set apart to till the order, 
nor was any part of it then in condition to be 
accepted or delivered. The defendants told 
the plaintiffs that Percival, a forwarder at 
Whitehall, would send a boat to take the 
lumber, when notified that it was ready to 
be delivered. Percival, during the same sea- 
son, and prior to Sept. 5, had taken up a 
boat for the defendants, and shipped a part 
of a load of lumber from the plaintiffs' dock, 
making up the residue from his own yard. 
He had frequently shipped lumber for the 
defendants. By the course of trade, a boat 
could not be obtained to carry a part of a 
load of lumber from Whitehall to New Ham- 
burgh, except for the price of a full load. 
To avoid paying such full price, arrange- 
ments had to be made to fill out the load. 
The defendants knew of this when they 
made the order of Sept. 5. The order only 
amounted to one-half a boat-load. Percival 
then had a pile of lumber (seventeen thou- 
sand six hundred and seventy-one feet of 
culls) to ship to the defendants, which was 
no part of the lumber to be dressed by 
plaintiffs. The lumber ordered on Sept. 5 
was to be taken from the lots examined by 
the defendants, and the lumber dressed and 
piled on the plaintiffs' dock, was all taken 
from the lumber shown. After the oral or- 
der defendants went into the lumber yard 
with the plaintiffs' foreman, Martin, and 
pointed out to him some of the piles from 
which they desired the lumber to be manu- 
factured, and directed plaintiffs to put the 
lumber, when ready, on plaintiffs' dock and 
to notify Percival; and told plaintiffs that 



when this was done, Percival, who was also 
a lumber dealer, would take up a boat and 
sliip the lumber, and make out the load from 
his yard. Subsequently, the 15th of Sept., 
the lumber haviug been prepared and dress- 
ed, according to the oral agreement, it was 
piled upon the dock of the plaintiffs at 
Whitehall, along the front of the planing- 
mill, and was. on the IGth of that month, 
measured by plaintiffs, and was In all re- 
spects ready for delivery by them, accord- 
ing to the oral agreement. 

The plaintiffs, on the same day, gave no- 
tice to Percival that the lumber was ready 
for delivery, and requested him to send a 
boat and take it away. Percival had not 
been notified that he was to ship the lum- 
ber, and paid no attention to the notice giv- 
en him by plaintiffs. On the other hand, 
the plaintiffs did not ascertain that Percival 
did not know of the arrangement, which the 
defendants had told them they would make 
with Percival as to shipping the lumber, un- 
til after the fire hereinafter mentioned. On 
the next day, Sunday, the lumber being still 
on the dock, as it was at the time Percival 
was notified, was consumed by an accidental 
fire, with the planing-mill and much other 
property. Judgment for defendants. 

Jlartiu W. Cooke, for appellants. Thomp- 
son & Weeks, for respondents. 

DWIGHT, C. No exceptions were taken 
in this cause, except to the conclusions of 
law derived by the referee from the facts as 
found in the report. There are but two 
questions to be considered: One is, whether 
the contract is within the statute of frauds; 
the other is, if it be held that it is within the 
statute, were the acts, done by the parties, 
sufficient to comply with its terms, so as to 
make the contract enforceable in a court of 
justice? 

In order to determine whether the con- 
tract is within the statute, it is important 
briefly to state the exact acts which the 
plaintiffs were to perform. 

The contract was plainly executory in its 
nature. There were no specific articles up- 
on which the minds of the buyer and seller 
met, so that it could be aflirmed that a 
title passed at the time of the contract. The 
seller was to select from the mass of lumber 
in his yard, certain portions that would com- 
ply with the buyer's order. The purposes 
of the parties could not even be accomplish- 
ed by the process of selection. The lumber 
must 1)0 put in a condition to answer the or- 
der. It must be dressed and cut into requir- 
ed sizes. The contract called for distinct 
parcels of surface pine boards, clapboards 
and matched ceiling. Part of the lumber 
was surfaced, and a portion of it still in the 
I'ough. The clapboards were manufactured 
from stuff one and a quarter-inch thick. It 
had to be split, surfaced and rabbeted. The 
order for the various items was a single one. 



ss 



SALES. 



there being fifteen thousand four hundred 
and forty-one feet of the surface piue, ten 
thousand one hundred and forty-four feet 
of clapboards, and eight thousand feet of 
matched ceiling. The surface boards and 
the ceiling were in existence, and only need- 
ed dressing to comply with the order. 
Whether the clapboards can be deemed to 
have been in existence may be more doubt- 
ful If a part of the order is withiu the 
statute of frauds, and a portion of it without 
it, the whole transaction must be deemed to 
be within it, as an entire contract cannot, In 
this case, be divided or apportioned. Cooke 
V. Tombs, 2 Anst. 420; Chater v. Beckett, 7 
T. R. 201; Mechelen v. Wallace, 7 A. & E. 
49; Thomas v. Williams, 10 B. & C. 664; 
Loomis v. Newhall, 15 Tick. 159. I think it 
clear that the contract was in its nature en- 
tire. It was in evidence that the intention 
was to buy enough, in connection with what 
Percival had on hand, to make up a boat- 
load. This could only be accomplished by 
using the entire amount of the order. Ac- 
cordingly even if the contract for the clap- 
boards was not a sale, it cannot be separated 
from the rest of the order, and the cases 
above cited are applicable. 

The question is thus reduced to the follow- 
ing proposition: Is a contract wliich is, in 
form, one of sale of lumber then in exist- 
ence for a fixed price, where the seller agrees 
to put it into a state of fitness to fill the or- 
der of the purchaser, his work being includ- 
ed in the price, in fact a contract for work 
and labor and not one of sale, and accord- 
ingly not within the statute of frauds? 

The New York statute is made applicable 
to the "sale of any goods, chattels or things 
In action." for the price of ^.jO or more. The 
words '-goods and chattels" are, literally 
taken, probably more comprehensive than 
the e.\pressions In the ICuglisli statute 
"goods, wares and merchandise." It will 
be assumed however in this discussion, that 
they are equivalent. 

There are at least three distinct views ns 
tr) the moaning of the words in the statute. 
These may be called, for the sake of conven- 
ience, the English, the Massachusetts and 
tlie Now York rules, aa representing the de- 
cisions In the respective courts. 

The Knglisli rule lays especial stress upon 
the point, wliether the articles bargained for 
(•an be regarded as goods capable of sale by 
the professed seller at the lime of delivery, 
without any reference fo the Inquiry wheth- 
er they were In existence at tlie time of the 
contract or not. If n ninnnfaeturer la to 
produce an article which at the time of the 
di'llvery could be the subject of sale by him, 
tlip CISC la within tli.> statute of frauda. The 
rule excludes nil c:im"M wIhto work la done 
upon the goods of niiolher, or even mate- 
rlnla supplied or added to the gooda of an- 
other. TliiiH If a cjirrlnge-m.'iker should re- 
pair my ''.".rrlnge, l>oth furnlKhlng labor nnil 
Hupplyliu: ninterlala. It would be a cniitnii-t 



for work and labor, as the whole result of 
his efforts would not produce a chattel which 
could be the subject of sale by him. If on 
the other hand, by the contract he lays out 
work or materials, or both, so as to produce 
a chattel which he could sell to me, the con- 
tract is within the statute. This conclusiou 
has been reached only after great discussion 
and much fluctuation of opinion, but must 
now be regarded as settled. The leading 
case upon this point is Lee v. Griffin, 1 Best 
& S. 272; Beuj. Sales, 77. The action was 
there brought by a dentist to recover £21 
sterling for two sets of artificial teeth, made 
for a deceased lady of whose estate the de- 
fendant was executor. The court held this 
to be the sale of a chattel within the stat- 
ute of frauds. Blackburn, J., stated the 
principle of the decision in a clear manner: 
"If the contract be such that it will result in 
the sale of a chattel, then it constitutes a 
sale, but if the work and labor be bestowed 
in such a manner as that the result woidd 
not be any thing which could properly be said 
to be the subject of sale, tlie action is for 
work and labor." 

The Massachusetts rule, as applicable to 
goods manufactured or modified after the 
bargain for them is made, mainly regards 
the point whether the products can, at the 
time stipulated for delivery, be regarded as 
"good.s. wares and merchandise," in the 
sense of being generally marketable com- 
modities made by the niauufacturer. In that 
respect it agrees with the English rule. The 
test is not the non-existence of the commod- 
ity at the time of the bargain. It is rather 
whether the manufacturer produces the arti- 
cle in the general course of his business or as 
the result of a special order. Goddard v. 
Biuney, 115 Mass. 4.')0, 15 Am. Rep. 112. In 
this very recent case, the result of their de- 
cisions is stated in the following terms: "A 
contract for the sale of articles then exist- 
ing, or such as the vendor In the ordinary 
cour.se of his business mauufacturoa or pro 
cures for the general market, whether on 
hand at the time or not. is a contract for 
the sale of goods to which the statute ap- 
plies. But on tlie other hand, if the goods 
arc to be manufactured especially for th<- 
purchaser and upon his special order, aii(i 
not for the general market, the case Is not 
wltliin the statute." Under this rule it was 
held In Gardner v. Joy, !) iMelc. 177, that a 
colli rnct to buy a certain nniiiber of boxes of 
<,'andlcs at a fixed price per pnniid, which the 
vendor said he would manufa<lure and dc 
liver In about throe months, was held to be 
a contract of sale. On tlie other hand In 
<!(Mlilard V. Blniicy, supra, the rontract with 
a carriage maiiur:i<'lurer was tliat he should 
make a buggy for tlie person ordering it. 
tli.'it the color of the lining should be drab, 
and the outside seat of cane, and have on II 
the moiiogrum and Initials of llie part.v for 
whom It was niaile. This was held not to 
I be a contract of sale within the statute. 



rOKMATION OF THE CONTRACT— STATUTE OF FRAUDS. 



89 



See, also, Mixer v. How.arth, 21 Pick. 205, 32 
Am. Dec. 256; Lamb v. Crafts, 12 Mete. 353; 
Spencer v. Cone, 1 Mete. 283. 

The New York rule is still different. It 
is held here by a long course of decisions 
that an agreement for the sale of any com- 
modity not in existence at the time, but 
which the vendor is to manufacture or put 
in a condition to be delivered, such as flour 
from wheat not yet ground, or nails to be 
made from iron belonging to the manufac- 
turer, is not a contract of sale. The New 
York rule lays stress on the word "sale." 
There must be a sale at the time the con- 
tract is made. The latest and most authori- 
tative expression of the rule is found in a 
recent case in this court. Parsons v. Loucks, 
48 N. Y. 17, 19, 8 Am. Rep. 517. The contrast 
between Parsons v. Loucks, in this state, on 
the one hand, and Lee v. Griffin, supra, in 
England, on the other, is that in the former 
case the word sale refers to the time of en- 
tering into the contract, while in the latter, 
reference is had to the time of delivery, as 
contemplated by the parties. If at that time 
it is a chattel it is enough, according to the 
English rule. Other cases in this state 
agreeing with Parsons v. Loucks are Crook- 
shank V. Burrell, 18 Johns. 58; Sewall v. 
Fitch, 8 Cow. 215; Robertson v. Vaughn, 5 
Sandf. 1; Parker v. Schenck, 28 Barb. 38. 
These cases are based on certain old deci- 
sions in England, such as Towers v. Os- 
borne, 1 Strange, 506, and Clayton v. An- 
drews, 4 Burrows, 2101, which have been 
wholly discarded in that country. 

The case at bar does not fall within the 
rule In Parsons v. Loucks. The facts of 
that case were that a manufacturer agreed 
to make for the other party to the contract, 
two tons of book paper. The paper was not 
in existence, and so far as appeai-s, not even 
the rags, "except so far as such existence 
may be argued from the fact that matter is 
indestructible." So in Sewall v. Fitch, su- 
pra, the nails which were the subject of the 
contract were not then wrought out, but 
were to be made and delivered at a future 
day. 

Nothing of this kind is found in the pres- 
ent ease. The lumber, with the possible ex- 
ception of the clapboards, was all In exist- 
ence when the contract was made. It only 
needed to be prepared for the purchaser — 
dressed and put in a condition to fill his or- 
der. The court accordingly is not hampered 
in the disposition of this cause by authority, 
but may proceed upon principle. 

Were this subject now open to full discus- 
sion upon principle, no more convenient and 
easily understood rule could be adopted than 
that enunciated in Lee v. Griffin. It is at 
once so philosophical and so readily compre- 
hensible, that it is a matter of surprise that 
it should have been first announced at so 
late a stage in the discussion of the stat- 
iite. It is too late to adopt it in full in this 
state. So far as authoritative decisions have 



gone, they must be respected, even at the 
expense of sound principle. The court how- 
ever in view of the present state of the law, 
should plant Itself, so far as It is not pre- 
cluded from doing so by authority, upon 
some clearly intelligible ground, and intro- 
duce no more nice and perplexing distinc- 
tions. I think that the true rule to be ap- 
plied in this state, is that when tlie chattel 
is in existence, so as not to be governed by 
Parsons v. Loucks, supra, the contract 
should be deemed to be one of sale, even 
though it may have been ordered from a 
seller who is to do some work upon it to 
adapt it to the uses of the purchaser. Such 
a rule makes but a single distinction, and 
that is between existing and non-existing 
chattels. There will still be border eases 
where it will be difficult to draw the line, 
and to discover whether the chattels are in 
existence or not. The mass of the cases 
will however readily be classified. If, on 
further discussion, the rule in Lee v. Griffin 
should be found most desirable as applicable 
to both kinds of transactions, a proper case 
will be presented for the consideration of 
the legislature. 

The view that this case is one of sale is 
sustained by Smith v. Central B. Co., *43 N. 
Y. ISO, and by Downs v. Ross, 23 Wend. 270. 

In the first of these cases there was a con- 
tract for the sale and delivery of a tiuautity 
of wood, to be cut from trees standing on 
the plaintiff's land. The court held that it 
could not be treated as an agreement for 
work and labor in manufacturing fire-wood 
out of standing trees. The cases already 
cited were distinguished in the fact that no 
change in the thing sold and to be delivered 
was contemplated, and that the transaction 
could be regarded as a sale in perfect con- 
sistency with the cases which hold that 
where the substance of the contract consists 
in the act of converting materials into a new 
and wholly different article, it is an agree- 
ment for work and labor. It was further 
considered that the case of Towers v. Os- 
borne, 1 Strange, 506, where an agreement 
for the manufacture of a chariot was a con- 
tract for work and labor, was extreme in its 
nature, and was not to be carried any fur- 
ther. Page 200. The cases of Garbutt v. 
Watson, 5 B. & Aid. 613. and Smith v. Snr- 
man, 9 B. & C. 561, were cited with ap- 
proval. In Garbutt v. Watson a sale of 
flour by a miller was held within the statute, 
although not ground when the bargain was 
made. 

In Downs v. Ross there was a contract 
for the sale of seven hundred and fifty bush- 
els of wheat, two hundred and fifty of the 
quantity being in a granary, and the residue 
unthreshed, but which the vendor agreed to 
get ready and deliver. The court held the 
contract to be within the statute of frauds, 
notwithstanding that the act of threshing 
was to be done by the vendor. The rule 
that governed the court was that if the 



90 



SALES. 



thing sold exist at the time in solicio, the 
mere fact that sonietliing remains to be done 
to put it in a marlcetable condition will not 
take the contract out of the opei-ation of the 
statute. Page 272. This proposition is in 
marked contrast to the view expressed by 
Cowen, J., in a dissenting opinion. His the- 
oi-y was that where the article which forms 
the subject of sale is understood by the par- 
ties to be defective in any particular which 
demands the finishing labor of the vendor in 
order to satisfy the bargain, it is a contract 
for work and labor and not of sale. The 
two theories (where the goods exist at the 
time of sale) have nowhere been more terse- 
ly and distinctly stated than in the conflict- 
ing opinions of Bronson and Cowen. J J., in 
this case. See also Courtright v. Stewart, 
19 Barb. 4m. 

The fallacy in the proposition of Cowen, 
J., is in assuming that there is any "work 
and labor" done for the vendee. All the 
work and labor is done on the vendor's prop- 
erty to put it in a condition to enable him 
to sell it. His compensation for it is found 
in the price of the goods sold. It is a juggle 
of words to call this "a mixed contract of 
sale and work and labor." When the goods 
leave the vendor's hands and pass over to 
the vendee they pass as chattels under an 
executed contract of sale. While any thing 
remained to be done the contract was exec- 
utory. There is abundance of autliority for 
maintaining that a contract in its origin ex- 
ecutory may, by the performance of acts un- 
der its terms, by one of the parties, become 
In the end executed. Rohde v. Thwaites, G 
B. & C. 3S8; Benj. Sales, chap. 5, and uases 
cited. 

The case of Donovan v. Wlllson. 20 Barb. 
138, and Parker v. Schenck, 28 Barb. 38, are 
to be upheld as falling within the principle 
of Parsons v. Loucks. supra. Both of these 
cases concerned articles not in existence, 
but to be produced by the manufacturer; in 
the one case beer was to be nianufacturcd. 
and in the other a bniss pump. So In Pas- 
saic Manuf. Co. v. HoiTman, H Daly. -I'.iri. the 
contract was for the manufacture and deliv- 
ery of lifly warps. None of these were in 
existence when the order was received. 
Wliile tlio case appears to fall witliln the 
rule of Parsons v. Ijoucks, the eminent 
judge who wrote an elaborate opinion ex- 
pressing the views of the court would Hci'in 
to rely upon the Mnssadnisetts rule rather 
than otir own. Wlinfever view might be en- 
tertained of the soundness of that distinc- 
tion It Is now too late to adopt It here, and 
the case cannot be sustained on that gro\ind. 

The only cn.Mc In our reiiorts appearing to 
stand In tlio way of the conclusion arrived 
nt in this cause Is Mearl v. Case, X\ Barb. 
2ft'2. The court In tlint case recognized the 
distinction lierein upheld. The only do\ibt 
about the case Is wlietlier the coin-t cotTccl- 
ly npplI'Ml tlie rule to the facts. These were 
that several pieces of niarhle put together In 



the form of a monument were standing in 
the yard of a marble-cutter. That person 
agreed with a buyer to polish, letter and fin- 
ish the article as a monument, and to d'li'- 
pose of it for an entire price— $200. The 
court held that there was no monument in 
existence at the time of the bargain. There 
were pieces of stone in the similitude of a 
monument, and that was all. 

It is unnecessary to quarrel with this case. 
If unsound, it is only a case of a misapplica- 
tion of an established rule. If sound, it is a 
so-called "border case," showing the rcfint- 
ments which are likely to arise In applying 
to various transactions tlie rule adopted in 
Sewall V. Fitch, and kindred cases. It is 
proper however to say that the notion that 
such an arrangement of marble placed in a 
cemetery over a grave cannot be regarded 
as a monument, in the absence of an inscrip- 
tion, seems highly strained. Then theio 
could not be a memorial church without an 
inscription. Then it could not have been 
said of Sir Christopher Wren, in bis relation 
to one of his great architectural productions. 
"Si quiuris monumentum, circumspice," It 
would seem to be enough if the monument 
reminds the passer-by of him whom it is in- 
tended to commemorate, and this might be 
by tradition, inscriptions on adjoining or 
neighboring objects, or otherwise. 

In the view of these principles, the defend- 
ants had the right to set up the statute of 
frauds. I think that this was so even as 
to the clapboards. Although not strictly in 
existence as clapboards, they fall within tlie 
rule in Smith v. Central R. Co. They were 
no more new products than was the wood in 
that case. There was simply to be gone 
through with a process of dividing anil 
adapting existing materials to the plaintiffs' 
use. It would be ditlicult to distinguish be- 
tween splitting planks into clapboards, and 
trees into wood. No especial skill is r<- 
quired, as all the work is done by machincr\ 
in general use, and readily managed by any 
producers of ordinary intelligence. The case 
bears no resemblance to that of Parsons v. 
I>oticks, where tlie product was to be create I 
from materials in no respect existing in the 
form of paper. The cases would have been 
more analogous had the contract in that 
case been to divide large sheets of paper in- 
to small ones, or to make packages of en- 
velojies from existing paper. In Oilman v. 
mil. :'.i; N. H. .•?n. it was held that a con- 
tract for sheep pelts to be taken from sheep 
was ,a contract for things In existence, and 
a sale. 

The next Incpilry is, wliellier there have 
been sulflclent acts done on the part of the 
buyers to comply with the statute. In order 
to properly solve this question. It Is neces- 
sary to look more do.sely Into the natiu'e of 
the contract. As lias been already suggest- 
ed, the contract was In Its origin executory. 
It called for selection on the part of the Sell- 
ers from a mass of materials. At the time 



FORMATION OF THE CONTKACT— STATUTK OF FJIAUDS. 



91 



of the bargain there was no sale. There 
was at most only an agreoiiiput to sell. The 
plaintiffs however lay much stress on the 
fact that after the oral bargain and after 
the defendants had inspected the lumber, 
they gave directions, also oral, to the plain- 
tiffs t« place the lumber after it had been 
made ready for delivery upon the dock and 
to give notice to Percival. They urge that 
the subsequent compliance with these direc- 
tions by the plaintiffs satisfy the terms of 
the statute. 

It will be observed that all of these direc- 
tions were given while the contract was still 
wholly executory, and before any act of se- 
lection had been performed by the i)laintiffs. 
It will thus be necessary to consider wheth- 
er these directions are sufficient to turn the 
executory contract of sale into an executed 
one, independent of the statute of frauds, 
and afterward to inquire whether there was 
any sufficient evidence of "acceptance and 
receipt" of the goods to take the case out of 
the statute. The.se questions are quite dis- 
tinct in their nature and governed by differ- 
ent considerations: (1) If the contract had 
been for goods less than $oO In value, or for 
more than that amount, and ordered by the 
defendants in writing, it would still have 
been executory in its nature, and would have 
passed no specific goods. It would have 
been an agreement to sell and not a sale. 
The ease would not have fallen within such 
authorities as Crofoot v. Bennett, 2 N. Y. 
25S, and Kimberly v. Patchin, 19 N. Y. 330. 
Since the goods could not have been identi- 
fied at all, except by the act of the seller in 
selecting such as would comply with the or- 
der, nor could the purposes of the contract 
have been performed except by the labor 
of the plaintiffs in adapting the goods to the 
defendants' use, the case falls within a rule 
laid down by Mr. Blackburn in his work on 
Sales (pages 151, 152): "Where, by the agree- 
ment, the vendor is to do any thing to the 
goods for the purpose of putting them into 
that state in which the purchaser is to be 
bound to accept them, or as it is some times 
worded, into a deliverable state, the per- 
formance of these things shall, in the ab- 
sence of circumstances indicating a contrary 
intention, be taken to be a condition preced- 
dent to the vesting of the propeity." Acra- 
man v. Morrice, 8 0. B. 44!); Gillett v. Hill, 
2 C. & M. 530; Campbell v. Mersey Docks, 
14 C. B. (N. S.) 412. 

Proceeding on the view that tliis was an 
executory contract, it might still pass into 
the class of executed sales by acts "of sub- 
sequent appropriation." In other words, if 
the subsequent acts of the seller, combined 
with evidence of intention on the part of the 
buyer, show that specific articles have been 
set apart in performance of the contract, 
there may be an executed sale and the prop- 
erty in the goods may pass to the purchaser. 
Blackburn, Sales, 12S; Benj. Sales, c. 5; 
Fragano v. Long, 4 B. & C. 219; Itohde v. 



Thwitites, 6 B. & C. 3SS; Aldridge v. .John- 
son, 7 E. & B. 8S5; Calcutta, etc., Company 
V. De Mattos, 33 L. .1. (Q. B.) 214, in Exch. 
Cham. This doctrine requires the as.seut 
of both parties, tliough it is held that it is 
not necessary that such assent should be 
given by the buyer subsequently to the ap- 
propriation by the vendor. It is enough 
that the minds of both parties acted upon 
the subject and assented to the selection. 
The vendor may be vested with an implied 
authority by tlie vendee to make the selec- 
tion and thus to vest the title in him. Browne 
V. Hare, 3 H. & N. 484; s. c., 4 H. & N. 822. 
This doctrine would be applicable to existing 
chattels where a mere selection from a mass 
of the same kind was requisite. On the other 
hand, if the goods are to be manufactured 
according to an order, it would seem that 
the mind of the purchaser after the manu- 
facture was complete, should act upon the 
question whether the goods had complied 
with the contract. See Mucklow v. Mangles, 
1 Taunt. 318; Bishop v. Crawshay, 3 B. & 
C. 415; Atkinson v. Bell, 8 B. & C. 277. This 
point may be illustrated by the case of a sale 
by sample, where the seller agrees to select 
from a mass of products certain items cor- 
responding with the sample, and forward 
them to a purchaser. The act of selection by 
the vendor will not jjass the title, for the 
plain and satisfactory reason, that the pur- 
chaser has still remaining a right to deter- 
mine whether the selected goods correspond 
with the sample. Jenner v. Smith, L. R. 4 
C. P. 270. In this case the plaintiff at a fair 
orally contracted to sell to the defendant two 
pockets of hops, and also two other pockets 
to corre.si^ond with a sample, which were 
lying in a warehouse in London, and which 
he was to forward. On his return to Lon- 
don, he selected two out of three pockets 
which he had there, and directed them to be 
marked to "wait the buyer's order." The 
buyer did no act to show his acceptance of 
the goods. The court held that the appro- 
priation was neither originally authorized 
nor subsequently assented to by the buyer, 
and that the property did not pass by the 
contract. Brett, J., put in a strong form the 
objection to the view that the buyer could 
have impliedly assented to the appropriation 
by the seller. It was urged, he said, "that 
there was evidence that by agreement be- 
tween the parties, the purchaser gave author- 
ity to the seller to select two pockets for him. 
If he did so. he gave up his power to object 
to the weighing and to the goods not cor- 
responding with the sample; for he could 
not give such authority and reserve his right 
to object, and indeed it has not been contend- 
ed that he gave up those rights. That seems 
to me to be conclusive to show that the de- 
fendant never gave the plaintiff authority to 
make the selection so as to bind him. Un- 
der the circumstances therefore it is impos- 
sible to say that the property passed." Page 
278. The same general principle was main- 



92 



SALES. 



tained in Kein v. Tupper, 52 N. Y. 550, where 
it was bold that the act of the vendor put- 
ting the goods in a state to be delivered did 
not pass the title, so long as the acceptance 
of the vendee, provided for under tJie terms 
of the contract, had not been obtained. 

The result is, that if this sale, executory as 
it was in its nature, had not fallen within 
the statute of frauds, there would have been 
no sufficient appropriation by the vendor to 
pass the title. The transaction, so far as 
it went, was even at comujon law an agi'ee- 
ment to sell and not an actual sale. 

(2) But even if it be assumed that this 
would have been an executed coutmct of 
sale in its own nature, without reference to 
the statute of frauds, was there "an accept- 
ance and a receipt" of the goods, or a part of 
them, by the buyer, so as to satisfy the stat- 
ute? 

The acceptance and receipt are both neces- 
sary. The contract is not valid uuless the 
buyer does both. These are two distinct 
things. There may be an actual receipt 
without an acceptance, and an acceptance 
without a receipt. The receipt of tlie goods 
is the act of taking p<issession of them. 
When the seller gives to tlie buyer the actual 
control of the goods, and the buyer accepts 
such control, he has actually received them. 
Such a receipt Is often an evidence of an ac- 
ceptance, but it is not the same thing. In- 
deed the receipt by the buyer may be, and 
often is, for the express purpose of seeing 
wliother he will accept or not. Blackb. Sales, 
lOG; see Brand v. Foclit, 3 Keyes, 409; Stone 
v. Browning, 51 N. Y. 211. 

There are some dicta, of various judges, 
cited by the plaiutiCfs to the effect that ae- 
coptance and receipt are equivalent Per 
Crompton, J., and Cockburn, Ch. B., in Cas- 
tle v. Swordor, C. II. & N. 8:!2; per Erie, C. 
.T., In Marvin v. Wallis. (i K. & B. 72(i. These 
remarks cannot be regarded as of any weight, 
being contrary to the decided current of au- 
thority. Indeed a late and approved writer 
.s;iys: "It may be conlidently assumed how- 
ever that the construction which attributes 
distinct meanings to the two expressions, "ac- 
ceptanee' and 'actual receipt,' is now too 
llrnily settled to be treated na an open ques- 
tlun, and tills Is plainly to be Inferred from 
the opinions delivered In SmIlh v. Iludsou." 
6 B. & S. 43f!; BenJ. Sales. 

It cannot be conei'ded that there was any 
neeeptnnee In the present ease by reason of 
llie acta and words occurring bctwtvn the 
parlies after ilio parol contract and before 
the gm«ls were prepnr«'d for delivery. There 
coulil be no accepianee without the assent 
of the liiiyerH to ilie artleles In tlieir changed 
conilltiiin. rind tin iidapted to their use. If 
the case had been one of specllle goods to be 
aelected from a mnss without any jirepiiratlon 
to be niiide, and nnthlng to be done by the 
vendor but merely to select, the mailer would 
have presented n very dl(Ti'i-oiit aspect . This 
distinction itt well pointed mil by WllleH, .1., 



in Bog Lead Min. Co. v. Montague, 10 C. B. 
(N. S.) 4S1. In this case the question ttu-ued 
upon the meaning of the word "acceptance," 
in another statute, but the court proceeded 
on the analogies supposed to be derived from 
the construction of the same word in the 
statute of frauds. The question was as to 
what was necessary to constitute an "ac- 
ceptance" of shares in a mining company, un- 
der 19 & 20 Vict. c. 47. The court having 
likened the case to that of a sale of chattels, 
said: "It may be that in the case of a eon- 
tract for the purchase of unascertained prop- 
erty to answer a particular deseriiition, no 
acceiitanco can be properly said to take place 
before the purchaser has had an opportunity 
of rejection. In such a case, the offer to 
l)urchase is subject not only to the assent or 
dissent of the seller, but also to the condition 
that the property to be delivered by him shall 
answer the stipulated description. A right 
of inspection to ascertain whether such con- 
dition has been complied with is in the con- 
templation of both parties to such a contract: 
and no complete and flnal acceptance, so as 
irrevocablj' to vest the property in the buy- 
er, can take place before he has exercised or 
waived that right. In order to constitute 
such a final and complete acceptance, tlie 
assent of the buyer should follow, not pre- 
cede, that of the seller. But where the con- 
tract is for a specific, asceitained chattel, 
the reasoning is altogether different. Equal- 
ly, where the offer to sell and deliver has been 
first m.ade bj' the seller and afterwards as- 
sented to by tlie buyer, and where the oiler 
to buy and accept has been first made by 
the buyer and afterwards assented to hy 
the seller, the contract Is complete by thi' 
assent of both parties, and It Is a contract 
the expression of which tcstilles tliat the sell- 
er has agreed to sell and deliver, and the 
buyer to buy and accept the chattel." Pages 
4S!), 400. 

This view is confirmed by Maberley v. Shep- 
pard, 10 Biiig. !)'.1. That was an action for 
goods sold and delivered, and It was proven 
that the defendant ordered a wagon to be 
made for him by the plalntilT. and, during 
the progress of the work, furnished the Iron 
work and sent it to the plain! ilT, and sent a 
man to help the plaintiff in lilling the iron 
to the wagon, and bought a tilt and sent It 
to the jilaintiff to be put on the wagon. It 
was Insisted, on these facts, that Ihe del'entl- 
ant had exercised such a dominion over the 
goods sold as amoiintwl to an aceeplancc. 
The court, per 'I'indal. C. .L, held that the 
plaintiff had be<'n rightly nonsnite<l. because 
the acts of the defendant had not been done 
after the wagon was finished an<l cajiablo of 
delivery, but iiKM'ely while It was In iirogrms, 
so that It still remained In the iilaintllT's yard 
for fiirdier work until It was llnished. The 
court adde<l: "If Ihe wagon had been com- 
)ilete<l and ready for delivery and the de- 
fendant had then sent a wi>rkman of his own 
to perform any addillon.al work upon It, such 



FORMATION OF THE CONTRACT— STATUTE OF FRAUDS. 



93 



conduct on the part of the defendant might 
have amounted to an acceptance." See also 
Benj. Sales, e. 4, and cases cited. 

The plaintiffs, in the case at bar, rely much 
upon the decision in Jlorton v. Tibbett, 15 
Ad. & El. (N. S.) 428. They maintain that 
this case clearly establishes that there may 
be an acceptance and receipt of goods by a 
purchaser, within the statute of frauds, al- 
though he has had no opiMrtunity of exam- 
ining them, and although he has done noth- 
ing to preclude himself from objecting tliat 
they do not correspond with the contract. 

The expressions in Morton v. Tibbett are 
not to be pressed any further than the facts 
of the case require. The buyer of wheat by 
sample had sent a carrier to a place named 
in a verbal contract between him and the 
seller on August 25. The wheat was received 
on board of one of the carrier's lighters for 
conveyance by canal to Wisbeach, where It 
arrived on the 28th. In the mean time it 
had been resold by the buyer, by the same 
sample, and was returned by the second pur- 
chaser because found to be of short weight. 
The defendant then wrote to the plaintiff on 
the 30th, also rejecting it for short weight. 
An action was brought for goods bargained 
and sold. There was a verdict for plaintiff, 
with leave to move for a nonsuit. The ques- 
tion for the appellate court was, whether 
there was any evidence that the defendant 
had accepted and received the goods so as to 
render him liable as buyer. The court held 
that the acceptance under the statute was 
not an act subsequent to the receipt of the 
goods, but must precede, or at least be con- 
temporaneous with it; and that there might 
be an acceptance to satisfy the statute, 
though the purchaser might on other grounds 
disaffirm the contract. 

Morton v. Tibbett decides no more than 
this, viz., that there may be a conditional 
acceptance. It is as if the purchaser had 
said: "I take these goods on the supposi- 
tion that they comply with the contract. I 
am not bound to decide that point at this 
moment. If, on examination, they do not 
correspond with the sample, I shall still 
return them under my common-law right, 
growing out of the very nature of the con- 
tract, to declare it void, because our minds 
never met on its subject-matter — non in haec 
foedera veni." It is not necessary to decide 
whether this distinction is sound. It is 
enough to say that It is Intelligible. The 
case, in no respect, decides that there can be 
an acceptance under the statute of frauds 
without a clear and distinct intent, or that 
unfinished articles can be presumed to be 
accepted before they are finished. The act 
of acceptance was clear and unequivocal. 
There was a distinct case of Intermeddling 
with the goods in the exercise of an act of 
ownership — a fact entirely wanting in the 
case at bar. The proof of acceptance was the 
act of resale before examination. The point 
of the decision is, that this was such an ex- 



ercise of dominion over the goods as is in- 
consistent with a continuance of the rights 
of property in the vendor, and therefore evi- 
dence to justify a jui-y in finding acceptance 
as well as actual receipt by the buyer. 
Hunt V. Hecht, 8 Exch. 814. 

Even when interpreted in this way, Mor- 
ton V. Tibbett cannot be reg.arded as abso- 
lutely settled law in England. See Coombs 
V. Bristol & Exeter Ry. Co., 3 H. & N. 510; 
Castle V. Sworder, 6 H. & N. 828. The 
court of queen's bench recognizes it, while 
the court of exchequer has not received it 
with favor. Later cases distinctly hold that 
the acceptance must take place after an op- 
portunity by the vendee to exercise an op- 
tion, or after the doing of some act waiving 
it. Bramwell, B., said in Coombs v. Bristol 
& Exeter Ry. Co.: "The cases establish 
that there can be no acceptance where there 
can be no opportunity for rejecting." All 
the cases were reviewed in Smith v. Hud- 
son, 6 Best & Smith, 431 (A. D. 18G5), where 
Hunt V. Hecht was approved. The two 
last cited cases disclose a principle applica- 
ble to the case at bar. 

In Hunt V. Hecht the defendant went to 
the plaintiff's warehouse and there inspect- 
ed a heap of ox bones, mixed with others 
inferior in quality. The defendant verbally 
agreed to pvirchase those of the better quali- 
ty, which were to be separated from the 
rest, and ordered them to be sent to his 
wharfinger. The bags were received on the 
9th, and examined next day by the defend- 
ant, and he at once refused to accept them. 
There was held to be no acceptance. The 
case was put upon the ground that no ac- 
ceptance was possible till after separation, 
and there was no pretense of an acceptance 
after that time. Martin, B., said that an ac- 
ceptance, to satisfy the statute, must be 
something more than a mere receipt. It 
means some act done after the vendee has 
exercised or had the means of exercising 
his right of rejection. 

In Smith v. Hudson, supra, barley was 
sold on November 3, 1SG3, by sample, by 
an oral contract. On the 7th it was taken 
by the seller to a railway station, where he 
had delivered grain to the purchaser on 
several prior dealings, and where it was 
his custom to receive it from other sellers. 
The barley was left at the freight-house of 
the railway, consigned to the order of the 
purchaser. It was the custom of the trade 
for the buyer to compare the sample with 
the bulk as delivered, and if the examination 
was not satisfactory, to reject it. This right 
continued in the present case, notwithstand- 
ing the delivery of the grain to the railway 
company. On the 9th the purchaser became 
bankrupt, and on the 11th the seller notified 
the station-master not to deliver the barley 
to the purchaser or his assignees. The court 
held that there was no acceptance sufficient 
to satisfy the statute. The most that could 
be said was, that the delivery to the com- 



Vi 



SALES. 



pany, considered as an agent of the buyer, 
was a receipt. It could not be claimed that 
it was an acceptance, the carrier having no 
implied authority to accept. The buyer had 
a right to see whether the built was accord- 
ing to the sample, and until he had exercis- 
ed that right there was no acceptance. Opin- 
ion of Cocliburn. Ch. J., 446; see, also. Caul- 
kins V. Hellman, 47 N. Y. 449; Ualterliue v. 
Kice, 02 Barb. 593; Edwards v. Grand Trunk 
Ry. Co., 48 ile. 379, 54 ile. 111. 

The case at bar only differs from these 
cases in the immaterial fact that the defend- 
ants, after the verbal contract was made, 
gave verbal directions as to the disposition 
which should be made of the goods after 
they were put into a condition ready for 
delivery. All that subsequently passed be- 
tween them was mere words, and had not 
ihe slightest tendency to show a waiver of 
the right to examine the goods to see if they 
corresponded with the contract. Whatever 
effect these words might have had iu indicat- 
ing an acceptance, if the goods had been spe- 
cific and ascertained at the time of the di- 
rections (see Cusack v. Robinson, 1 Best & 
S. 299), they were without significance under 
the circumstances, as the meeting of the 
minds of the parties upon the subject to be 
settled was necessary. Shepherd v. I'ressey, 
32 N. H. 57. In this case the effect of subse- 
quent engagements by the buyer was passed 
upon as to their tendency to show a receipt 
of the goods by him. The court said: "As 
mere words constituting a part of the origi- 
nal contract do not constitute an acceptance, 



so we are of opinion that mere words after 
words used, looking to the future, to acts 
afterward done by the buyer toward carry- 
ing out the contract, do not constitute an 
acceptance or prove the actual receipt re- 
quired by the statute." The case was sti-on- 
ger than that under discussion, as the goods 
were specific and fully set apart for the pur- 
chaser at the time of the subsequent con- 
versations. No distinction is perceived be- 
tween future acts to be done by the buyer 
and by the seller, as both equally derive 
their force from the buyer's assent. 

I see no reason in the case at bar to hold 
that the defendants received the goods, in- 
dependent of the matter of acceptance. 
There was no evidence that Percival became 
their agent for this purpose. The most that 
can be said is that they promised the plain- 
tiffs that they would make Percival their 
agent. This promise being oral and connect- 
ed with the sale, is not binding. They did 
not in fact communicate with him, nor did 
he assume any dominion or control over the 
property. The promissory representations of 
the ijlaiutiffs are clearly within the rule in 
Shepherd v. Pressey, supra. 

The whole case falls within the doctrine 
in Shindler v. Houston, 1 N. Y. 2(51, there 
being no sufficient act of the parties amount- 
ing to transfer of the possession of the lum- 
ber to the buyer and acceptance by him. 

The judgment of the court below should be 
affirmed. 

All concur. 

Judgment affirmed. 



rOKMATlON OF THE CONTRACT— STATUTE OF FliAUDS. 



95 



GODDARD V. BINNEY. 

(115 Mass. 450.) 

Supreme .Tudicial Court of Massachusetts. Suf- 
folk. Sept. 4, 1874. 

Contract to recover tbe price of a buggy 
built by plaiutifC for defendant. Plaintiff 
agreed to build a buggy for defendant, and 
to deliver it at a certain time. Defendant 
gave special dire<_'tions as to style and finish. 
The buggy was built according to directions. 
Before it was finished, defendant called to 
see it, and in answer to plaintiff, who asked 
him if he would sell it. said no; that he 
would keep it. When the buggy was fin- 
isliod, plaintiff sent a bill for it, which de- 
fendant retained, promising to see plaintiff 
in regard to it. The buggy was afterwards 
burned in plaintiff's possession. The case 
was reported to the supreme judicial court. 

C. A. Welch, for plaintiff. G. Putnam, 
.Tr., for defendant. 

AMES, J. Whether an agreement like that 
described in this report should be considered 
as a contract for the sale of goods, within 
the meaning of the statute of frauds, or a 
contract for labor, services and materials, 
and therefore not within that .statute, is a 
(piestion upon which there is a conflict of au- 
thority. According to a long course of de- 
cisions in New York, and in some other states 
of the Union, an agreement for the sale of 
any commodity not in existence at the time, 
but which the vendor is to manufacture or 
put in a condition to be delivered (such as 
Hour from wheat not yet ground, or nails to 
be made from iron in the vendor's hands), 
is not a contract of sale within the meaning 
of the statute. Crookshank v. Burrell, IS 
Johns. 58; Sewall v. Fitch, 8 Cow. 215; Rob- 
ertson V. Vaughn, 5 Sandf. 1; Downs v. Ross, 
•-'3 Wend. 270; Eichelberger v. M'Cauley, 5 
Har. & J. 21.3. In England, on the other 
hand, the tendency of the recent decisions 
is to treat all contracts of such a kind in- 
tended to result in a sale, as substantially 
ciintracts for the sale of chattels; and the 
decision in Lee v. Griffin, 1 B. & S. 272, goes 
so far as to hold that a contract to make 
and fit a set of artificial teeth for a patient 
is essentially a contract for the sale of goods, 
and therefore is subject to the provisions of 
the statute. See Maberley v. Sheppard. 10 
Bing. 99; Howe v. Palmer, 3 B. & Aid. 321; 
Baldoy V. Parker. 2 B. & C. 37; Atkinson v. 
Bell, 8 B. & C. 277. 

In this commonwealth, a rule avoiding 
both of these extremes was established in 
Mixer v. Howarth, 21 Pick. 205, and has been 
recognized and affirmed in repeated decisions 
of more recent date. The effect of these 
decisions we undex-stand to be this, namely, 
that a contract for the sale of articles then 
existing or such as the vendor in the ordinary 
course of his business manufactures or pro- 
cures for the general market, whether on 
hand at the time or not, is a contract for the 



sale of goods, to which the st;itute applies. 
But on the other hand, if the goods are to be 
manufactured especially for the purchaser, 
and upon his special order, and not for the 
general market, the case is not within the 
statute. Spencer v. Cone, 1 Met. 283. "The 
distinction," says Chief Justice Shaw, in 
Lamb v. Crafts, 12 Met. 353, "we believe is 
now well understood. When a person stip 
ulates for the future sale of articles, which 
he is habitually making, and which, at the 
time, are not made or finished, it is essential- 
ly a contract of sale, and not a contract for 
labor; otherwise, when the article is made 
pursuant to the agreement." In Gardner v. 
Joy, 9 Met. 177, a contract to buy a certain 
number of boxes of candles at a fixed rate 
per pound, which the vendor said he would 
manufacture and deliver In about three 
months, was held to be a contract of sale 
and within the statute. To the same general 
effect are Waterman v. Meigs, 4 Cush. 497, 
and Clark v. Nichols, 107 Mass. 547. It is 
true that in "the infinitely various shades of 
different conti'acts," there is some practical 
difficulty in disposing of the questions that 
arise under that section of the statute. Gen. 
St. c. 105, § 5. But we see no gi-ound for 
holding that there is any uncertainty in the 
rule itself. On the contrary, its coirectness 
and justice are clearly implied or expressly 
affirmed in all of our decisions upon the sub- 
ject matter. It is proper to say also that 
the present case is a much stronger one than 
Mixer v. Howarth. In this case, the car- 
riage was not only built for the defendant, 
but in conformity in some respects with his 
directions, and at his request was marked 
with his initials. It was neither Intended 
nor adapted for the general market. As we 
are by no means prepared to overrule the 
decision in that case, we must therefore hold 
that the statute of frauds does not apply to 
the contract which the plaintiff is seeking 
to enforce in this action. 

Independently of that statute, and in cases 
to which it does not apply, it is well settled 
that as between the immediate parties, prop- 
ei'ty in personal chattels may pass by bargain 
and sale without actual delivery. If the par- 
ties have agreed upon the specific thing that 
is sold and the price that the buyer is to pay 
for it, and nothing remains to be done but 
that the buyer should pay the price and take 
the same thing, the property passes to the 
buyer, and with it the risk of loss by fire or 
any other accident. The appropriation of the 
chattel to the buyer is equivalent, for that 
purpose, to delivery by the seller. The as- 
sent of the buyer to take the specific chattel 
is equivalent for the same pui-pose to his 
acceptance of possession. Dixon v. Yates, 
5 B. & Ad. 313, 340. The property may well 
be in the bujer. though the right of pos- 
session, or lien for the price, is in the seller. 
There could in fact be no such lien without 
a change of ownership. No man can be 
said to liave a lien, in the proper sense of the 



96 



SALES. 



term, upon his o-wn property, and the seller's 
lien can only be upon tlae buyer's property. 
It has often been decided that assumpsit for 
the price of goods bargained and sold can be 
maintained where the goods have been se- 
lected by the buyer, and set apart for him by 
the seller, though not actually delivered to 
him, and where nothing remains to be done 
except that the buyer should pay the agreed 
price. In such a state of things the property 
vests in him, and with it tbe risk of any ac- 
cident that may happen to the goods in the 
meantime. Noy's Maxims, S9; 2 Kent, Com. 
(12th Ed.) 492; Bloxam v. Sanders, 4 B. & 
C. 941; Tarling v. Baxter, 6 B. & C. 3G0; 
Hinde v. Whitehouse, 7 East, 571; Macom- 
ber V. Parker, 13 Pick. 175, 1S3; Morse v. 
Sherman, IOC Mass. 430. 

In the present case, nothing remained to 
be done on the part of the plaintiff. The 
price had been agreed upon; the specific 
chattel had been finished according to order, 
set apart and appropriated for the defend- 



ant, and marked with his initials. The plain- 
tiff had not undertaken to deliver it else- 
where than on his own premises. He gave 
notice that it was finished, and presented 
his bill to the defendant, who promised to 
pay it soon. He had previously requested 
that the carriage should not be sold, a re- 
quest which substantially is equivalent to 
asking the plaintiff to keep it for him when 
finished. Without contending that these cir- 
cumstances amount to a delivery and accept- 
ance within the statute of frauds, the plain- 
tiff may well cl.ijm that enough has been 
done, in a case not within that statute, to 
vest the general ownership in the defend- 
ant, and to cast upon him the risk of loss 
by fire, while the chattel remained in the 
plaintiff's possession. 

According to the terms of the reservation, 
the verdict must be set aside, and judgment 
entered for the plaintiff. 

COLT and ENDICOTT, JJ., absent 



FOKMATION OF THE CONTUACI— STATUTE OF FRAUDS. 



97 



HUMBLE V. MITCHELL. 

(11 Adol. & B. 205.) 

Queen's Bench, Mi<'h,aclma8 Vacation. Nov. 
27, 183U. 

Assumpsit by the purcliaser of shares in a 
joint-stock company, called the Northern and 
Central Bank of England, against the vendor 
for refusing to sign a notice of transfer ten- 
dered to him for signature, and to deliver 
the certificates of the shares, without which 
the shares could not be transferred. 

Pleas. 1. That the contract mentioned in 
the declaration was an entire contract for 
the sale of goods, wares, and merchandises, 
for a price exceeding £10, and th,at plaintiff 
liad not accepted or received the said goods, 
&c., or any part thereof, and did not give any 
thing in earnest to bind the bargain or in 
part payment, and that no note or memoran- 
dum in writing of the bargain was made and 
signed by defendant or his agent thereunto 
lawfully authorized. Verification. 

2. That the contract was a contract for the 
sale of, and relating to an interest in and 
concerning lands, tenements, and heredita- 
ments of and belonging to the said company, 
and that there was not in respect of, or re- 
lating to, the said contract, an agreement or 
any memorandum or note thereof In writing 
signed by defendant, or by any other person 
thereunto by him lawfully authorized accord- 
ing to the form of the statute etc. Verifica- 
tion. 

Replication: to the first plea, denying that 
the contract was for the sale of goods, wares, 
etc.: to the second, denying that it was for 
the sale of an interest in lands etc. Issues 
thereon. 

At the trial of the cause before Coleridge, 
J., at the Liverpool spring assizes, 1838, it 
was proved that the company was in posses- 
sion of real estate; but no title deeds to the 
estate were produced; nor was it shewn what 

GRIF. PERS. PROP. — 7 



was the nature of the property belonging to 
the company, or the extent of their Interest 
therein. The Juiy found a verdict for the 
plaintiff on both issues, subject to a motion 
to enter a verdict for the defendant. In th« 
following Easter term Alexander obtained a 
rule nisi according to the leave reserved, cit- 
ing, on the first plea. Ex parte Vallance, 2 
Deac. 354, and, on the second plea, Ex parte 
The Vauxhall Bridge Company, 1 Glyn. & J. 
101, and Ex parte Home, 7 Bam. & C. 632. 

Cresswell and Crompton now shewed cause. 
Mr. Alexander, contra. 

Lord DENMAN, C. J. With respect to the 
question arising on the second plea, we have 
already disposed of it. The other point is 
whether the shares in this company are 
goods, wares, or merchandises, within the 
meaning of § 17 of the statute of frauds. It 
appears that no case has been found directly 
in point; but it is contended that the de- 
cisions uijon reputed ownership are applica- 
ble, and that there is no material distinction 
between the words used in the statute of 
frauds, and in the bankrupt act. I think 
that both the language and the intention of 
the two acts are distinguishable, and that 
the decisions upon the latter act cannot be 
reasonably extended to the statute of frauds. 
Shares in a joint-stock company like this are 
mere choses in action, incapable of deliveiy, 
and not within the scope of the 17th section. 
A contract in writing was therefore unneces- 
sary. 

PATTESON, WILLIAMS, and COLE- 
RIDGE, JJ., concurred. 

Rule discharged. 

A question also arose as to the proper mode 
of estimating the damages in this action; but 
on this point the parties eventually agreed. 



98 



SALES. 



TISDALE V. HARRIS. 
(20 Pick. 9.) 

Supreme Judicial Court of Massachusetts. 
March Term, 1838. 

Assumpsit by the plaintiff, an inhabitant 
of New York, against the defendant, a mer- 
chant of Boston, on a contract alleged to 
have been made in October. 1S35, by which 
the defendant agreed to sell to the plaintiff 
two hundred shares, with all the earnings 
thereon, in the capital stock of the Collins 
Manufacturing Company, a corporation es- 
tablished in Connecticut, at §10.80 per share, 
the par value being .$10 per share. The ob- 
ject of the suit was to recover ?300, being 
the amount of a dividend of 15 per cent on 
the two hundred shares, declared on the 7th 
of October. lS3o. and payable on the 15th. 

At the trial, belore Shaw, C. J., Nathaniel 
Curtis, junior, of the firm of Curtis & Leav- 
ins, being called as a witness by the plain- 
tiff to prove the contract and the breach, 
the defendant objected to any parol evi- 
dence of the contract, because the contract 
was reduced to writing, and he produced a 
memorandum as follows, dated Boston. Oct. 
14, 1835, directed to the defendant and sign- 
ed by Curtis & Leavins:— "Sir, When you 
will furnish the certificate of 200 shares in 
the Collins Manufacturing Company to Mr. 
Ssmiuel T. Tisdale. of New York, we hereby 
dgree to pay you for the same at lOS cents 
Mer dollar or S per cent advance on the par 
amount of ten dollars each." But it was 
ruled, that this paper was not to be con- 
sidered as the contract of the defendant to 
sell, but of the plaintiff by his agents to pay; 
that if the contract of the defendant to sell 
was not reduced to writing, the objection to 
the parol evidence could not prevail. 

The witness toslificd. that at the request 
of the plaintiff ho applied to the defendant 
about the 10th of October, 1835, in order to 
ascertain whether he would sell his shares; 
that the defendant said he was disposed to 
sell them at a fair price; but subsequently 
the witness offered him the par value; that 
the dofciidant said he would not sell at that 
rate, and that he had been recently inform- 
ed that there would probably be a dividend 
of 10 per cent In December; that the wit- 
ness took the refusal of them at $10.80- per 
share, until he could hear from New York; 
that having rcidved a letter from the plaln- 
tirr. dated October llilli. he called on the de- 
fendant and asked him whether In offering 
the sharcH he Intended to Include all the 
earnings, and the defendant said yes, all 
that belongs io Iheni, all that they have 
earned; that Hie witness road to the defend- 
ant the letter of October 13th, In which the 
plnlnllff says ho will take the fitock nt $10.- 
80 rash, all earnings or dividends of the 
company "P to the tlriK- of sale to be In- 
cluded; that the defendant wrote a letter 
to his iigi'Tit at Hartford, Instructing lilin to 
transfer the sluircs Into the iiaine of the 



plaintiff, and send the certificate to the de- 
fendant, and the defendant handed the let- 
ter to the witness to forward, which he did: 
that the defendant said he did not know the 
plaintiff, and he thought, as the shares 
would be transferred, he ought to have 
something to secure him, to which the wit- 
ness assented, and the defendant wrote the 
memorandum which the witness signed, 
agreeing to pay him the money; that after 
sufficient time had elapsed for an answer, 
the witness called on the defendant, and at 
that time both the witness and the defend- 
ant had received information that a divi- 
dend of 15 per cent had been declared up- 
on the shares; that at subsequent inter- 
views the witness demanded the certificate 
of stock with an authority to receive the 
dividend, and was ready thereupon to pay 
the money, but the defendant declined giv- 
ing the authority to receive the dividend; 
that some weeks afterwards, and after this 
action had been commenced, the defendant 
called on the witness for the money and 
threatened to sue him upon the contract 
which he had given for the plaintiff, if he 
did not pay it, whereupon the witness took 
the certificate and paid the money, but un- 
der an express declaration that it was not 
to prejudice the claim of the plaintiff for the 
dividend. 

The question of fact was left to the jury, 
whether the bargain made by the defendant 
for the sale of the shares included all divi- 
dends then due or growing due, with direc- 
tions, if it did, to find a verdict for the plain- 
tiff; otherwise to find a verdict for the de- 
fendant. 

A verdict vpas returned for the plaiutiiT; 
which the defendant moved to set aside: 1. 
Because parol evidence was admitted to add 
to and vary a written contract made subse- 
quently to the conversation and letters re- 
ferred to; 2. Because the contract sot up 
was within the statute of frauds, being a 
contract for the sale of goods, wares, or 
merchandi.se for the price of fifty dollars 
or more, under which, at the time of action 
brought, there had been no acceptance of 
the same or any part thereof by the pur- 
chaser, nor any earnest or part payment 
made, and so was incapable of proof other- 
wise than by memorandum, in writing, sign- 
ed by the defendant or his agent. 

SIIAW, 0. J., delivered the opinion of the 
court. 

S(>veral points reserved tit the trial of this 
cause are now waived, and the motion made 
by the defendant for a new trial Is placed 
on two grounils. 

First, that under the circumstances, parol 
evidence was not admissible, because the con- 
tract of the ])artli-s was redticed to writing, 
and that such writing was the best evi- 
dence. But the couit are of opinion, that the 
objec-tlon Is not sustained by the fact. No 
loiilract In writing was niado by the defend- 



FOliMATlON OF THE CONTRACT— STATUTE OF FRAUDS. 



99 



ant with the plaintiff, to sell those shares. 
After the negotiation had resulted in an 
agreement, the agent of the plaintiff, in the 
name of hi.s firm, gave the defendant a mem- 
orandum in writing, undertaking to pay the 
money, on the performance of the defend- 
ant's agreement to transfer the shares. But 
it was not signed by the defendant, nor by 
any person for him, nor did it purport to 
e.xpress his agreement. The cotu't are there- 
fore of opinion, that the defendant's agree- 
ment not being reduced to writing, the parol 
evidence was i-ightly admitted. 

But by far the most important question in 
the case arises on the objection, that the case 
is within the statute of frauds. This statute, 
which is copied precisely from the English 
statute, is as follows. "No contract for the 
sale of goods, wares, or merchandise for the 
price of ten pounds ($33.33) or more, shall be 
allowed to be good, except the pm-chaser shall 
accept part of the goods so sold, and actually' 
receive the same, or give something in ear- 
nest to bind the bargain, or in part payment, 
or that some note or memorandum in writing 
of the said bargain be made and signed by 
the parties to be charged by such contract, or 
their agent thereunto lawfully authorized." 

This being a contract for the sale of shares 
in an incorporated company in a neighboring 
state, for the price of more than ten pounds, 
and no part having been delivered, and no 
pm-chase-money or earnest paid, the question 
is, whether it can be allowed to be good, 
without a note or memorandum in writing, 
signed by the party to be charged with it. 
This depends upon the question, whether 
such shares are goods, wares, or merchan- 
dise within the true meaning of the statute. 

It is somewhat remarkable that this ques- 
tion, arising on the St. 29 Car. II., in the 
same terms, which ours has copied, has not 
been definitively settled in England. In the 
case of Pickering v. Appleby, Com. Rep. 354, 
the case was directly and fully argued, be- 
fore the twelve judges, who were equally 
divided upon it. But in several other cases 
afterwards determined in chancery, the bet- 
ter opinion seemed to be, that shares in in- 
corporated companies were within the stat- 
ute, as goods or merchandise. Mussell v. 
Cooke, Finch. Prec. 533; Crull v. Dodson, 
Sel. Cas. Ch. 41. 

We are inclined to the opinion, that the 
weight of authorities, in modern times, is, 
that contracts for the sale of stocks and 
shares in incorporated companies, for more 
than ten pounds, are not valid, unless there 
has been a note or memorandum in writing, 
or earnest or part payment. 4 Wheat. 89, 
note; 3 .Starkie, Ev. (4th Am. Ed.) 608. 

Supposing this a new question now for the 
first time calling for a construction of the 
statute, the court are of opinion, that as well 
by its terms as its general policy, stocks are 
fairly within its operation. The words 
"goods" and "merchandise," are both of very 
large signification. "Bona," as used in the 



civil law, Is almost as extensive as personal 
property Itself, and in many respects it has 
nearly as large a signification in the common 
law. The word "merchandise" also, includ- 
ing in general objects of traffic and com. 
merce, is broad enough to include stocks or 
shares in incorporated companies. 

There are many cases indeed in which It 
has been held in England that buying and 
selling stocks did not subject a person to the 
operation of the bankrupt laws, and thence 
it has been argued that they cannot bo con- 
sidered as merchandise, because banlu'uptcy 
extends to persons using the trade of mer- 
chandise. But it must be recollected that the 
bankrupt acts were deemed to be highly 
penal and coercive, and tended to deprive a 
man in trade of all his property. But most 
joint stock companies were founded on the 
hypothesis at least, that most of the share- 
holders took shares as an investment and 
not as an object of traffic; and the construc- 
tion in question only decided, that by taking 
and holding such shares merely as an invest- 
ment, a man should not be deemed a mer- 
chant so as to subject himself to the highly 
coercive process of the bankinipt laws. These 
cases, therefore, do not bear much on the 
general question. 

The main argument relied upon, by those 
who contend that shares are not within the 
statute, is this: that the statute provides that 
such contract shall not be good, etc., among 
other things, except the purchaser shall ac- 
cept part of the goods. From this it is ar- 
gued, that by necessary implication the stat- 
ute applies only to goods of which part may 
be delivered. This seems, however, to be 
rather a nan-ow and forced construction. The 
provision is general, that no contract for the 
sale of goods, etc. shall be allowed to be 
good. The exception is, when part are de- 
livered; but if part cannot be delivered, then 
the exception cannot exist to take the case 
out of the general prohibition. The provision 
extended to a gi-eat variety of objects, and the 
exception may well be construed to apply 
only to such of those objects to which it is ap- 
plicable, without affecting others, to which 
from their nature it cannot apply. 

There is nothing in the nature of stocks, or 
shares in companies, which in reason or 
sound policy should exempt contracts in re- 
spect to them from those reasonable restric- 
tions, designed by the statute to prevent 
frauds in the sale of other commodities. On 
the contrary, these companies have become . 
so numerous, so large an amount of the prop- 
erty of the community is now Invested in 
them, and as the ordinary indicia of prop- 
erty, arising from delivery and possession, 
cannot take place, there seems to be peculiar 
reason for extending the provisions of this 
statute to them. As they may properly be in- 
cluded uuder the term "goods," as they are 
within the reason and policy of the act, the 
court are of opinion, that a contract for the 
sale of shares, in the absence of the other 



100 



SALES. 



requisites, must be proved by some note or 
memorandum in writing; and as there was 
no such memorandum in writing, in the pres- 
ent case, the plaintiff is not entitled to main- 
tain this action. As to the argument, that 
here was a part performance, by a payment 



of the money on one side, and the delivery 
of the certificate on the other, these acts took 
place after this action was brought, and can- 
not therefore be relied upon to show a cause 
of action when the action was commenced. 
Verdict set aside, and plaintiff nonsuit 



FOKMATION OF THE CONTRACT— STATUTE OF FRAUDS. 



101 



BALDWIN y. WILLIAMS. 

(3 Mctc. 365.) 

Supreme Judicial Court of Massachusetts. 
Nov. Term, ISil. 

This case was tried before Wilde, J., who 
made the following report of it:— 

This was an action of assumpsit, and the 
declaration set forth an agreement of the 
plnintiff that he would bargain, sell, assign, 
transfer, and set over to the defendant, and 
indorse without recourse to him, the plain- 
tiff, in any event, tv/o notes of hand by him 
held, signed by S. J. Gardner; one dated 
April 24th, 1835, for the payment of 31,.500; 
the other dated May 5th, 1830, for the pay- 
ment of $500; and both payable to the plain- 
tiff or order on the 3d of April, 1839, with 
interest from their dates. The declaration 
set forth an agreement by the defendant, in 
consideration of the plaintiff's agreement 
aforesaid, and In payment for said Gard- 
ner's said notes, to pay the plaintiff $1,000 
in cash, and to give the plaintiff a post note, 
made by the Lafayette Bank, for $1,000, and 
also a note signed by J. B. Russell & Co. and 
indorsed by D. W. Williams for $1,000. 

The plaintiff at the trial proved an oral 
agreement with the defendant as set forth 
in the declaration, and an offer by the plain- 
tiff to comply with his part of said agree- 
ment, and a tender of said Gardner's said 
notes, indorsed by the plaintiff without re- 
course to him in any event, and a demand 
upon the defendant to fulfil his part of said 
agreement, and the refusal of the defendant 
to do so. But the plaintiff Introduced no 
evidence tending to show that any thing 
passed between the parties at the time of 
making the said agreement, or was given in 
earnest to bind the bargain. 

The judge advised a nonsuit upon this ev- 
idence, because the contract was not in 
writing nor proved by any note or memo- 
randum in writing signed by the defend- 
ant or his agent, and nothing was received 
by the purchaser, nor given in earnest to 
bind the bargain. A nonsuit was accord- 
ingly entered, which is to stand if in the 
opinion of the whole court the agreement 
set forth in the declaration falls within the 
statute of frauds (Rev. St. c. 74, § 4); oth- 
erwise, the nonsuit to be taken off, and a 
new trial granted. 

Mr. Clarke, for plaintiff. S. D. Parker, for 
defendant. 



WILDE, J. This action is founded on an 
oral contract, and the question is, whether 
it is a contr.act of sale within the statute 
of frauds. 

The plaintiff's counsel contends in the first 
place that the contract is not a contract 
for the sale of the notes mentioned in the 
declaration, but a mere agreement for the 
exchange of them; and in the second place 



that If the agreement is to be considered as 
a contract of sale, yet it is not a contract 
within that statute. 

As to the first point, the defendant's coun- 
sel contends that an agreement to exchange 
notes is a mutual contract of sale. But it 
is not necessary to decide this question, for 
the agreement of the defendant, as alleged 
in the declaration, was to pay for the plain- 
tiff''s two notes $2,000 in cash, in addition 
to -two other notes; and that this was a 
contract of sale is, we think, very clear. 

The other question is more doubtful. But 
the better opinion seems to us to be, that 
this Is a contract within the true meaning 
of the statute of frauds. It is certainly 
within the mischief thereby intended to be 
prevented; and the words of the statute, 
"goods" and "merchandise," are sufficiently 
comprehensive to include promissory notes 
of hand. The word "goods" is a word of 
large signification; and so is the word 
"merchandise." "Merx est quicquid vendi 
potest." 

In Tisdale v. Harris, 20 Pick. 9, it was de- 
cided that a contract for the sale of shares 
In a manufacturing corporation is a contract 
for the sale of goods or merchandise with- 
in the statute; and the reasons on which 
that decision was founded seem fully to au- 
thorize 'a similar decision as to promissory 
notes of hand. A different decision has re- 
cently been made in England in Humble v. 
Mitchell, 3 Perry & D. 141, 11 Adol. & E. 
207. In that case It was decided that a 
contract for the sale of shares in a joint- 
stock banking company was not within the 
statute of frauds. But it seems to us that 
the reasoning in the case of Tisdale v. Har- 
ris is very cogent and satisfactory; and it 
is supported by several other cases. In 
Mills V. Gore, 20 Pick. 28, it was decided 
that a bill in equity might be maintained to 
compel the redelivery of a deed and a prom- 
issory note of hand, on the provision in the 
Rev. St. c. 81, § 8, which gives the court 
jurisdiction in all suits to compel the rede- 
livery of any goods or chattels whatsoever, 
taken and detained from the owner thereof, 
and secreted or withheld, so that the same 
cannot be replevied. And the same point 
was decided in Clapp v. Shephard, 23 Pick. 
228. In a former statute (St. 1823, c. 140), 
there was a similar provision which extend- 
ed expressly to "any goods or chattels, deed, 
bond, note, bill, specialty, writing, or other 
personal property." And the learned com- 
missioners, in a note on the Rev. St c. 81, 
§ 8, say that the words " 'goods or chattels' 
are supposed to comprehend the several par- 
ticulars immediately following them in St. 
1823, c. 140, as well as many others that 
are not mentioned." 

The word "chattels" is not contained in 
the provision of the statute of frauds; but 
personal chattels are movable goods, and so 
far as these words may relate to the ques- 
tion under consideration they seem to have 



102 



SALES. 



the same meaning. But however this may 
be, we think the present case cannot be 
distinguished In principle from Tisdale v. 
Harris; and upon the authority of that case, 
taking into consideration again the reasons 



and principles on which It was decided, we 
are of opinion that the contract in question 
is within the statute of frauds, and conse- 
quently that the motion to set aside the 
nonsuit must be overruled. 



FORMATION OF THE CONTUACT— STATUTE OF FilAUDS. 



103 



ALLARD V. GRl!-ASERT. 

(61 N. Y. 1.) 

Commission of Appeals of New York. Sept. 
Term, 1874. 

Action for goods sold and delivered. De- 
fendant firm orally agreed with an agent of 
plaintiffs to buy by sample the following bill 
of bats and caps: 

Of case No. 361, % doz. child's 
Leghorn sylvans, at $11 per 
doz. $ 5 50 

Of case No. 312, one doz. harvest 
hats, at 4 50 

Of case No. 371, half doz. Pana- 
ma hats, at 28 50 a doz. 

Of case No. 372, half doz. Pana- 
ma hats, at 36 00 a doz. 

Of case No. 326, one doz. palm 
leaf hats, at 2 50 a doz. 

Of case No. 324, one doz. palm 
leaf hats, at 3 00 a doz. 

Of case No. 329, one doz. white 
Gleuwood, at 15 00 a doz. 

Of case No. 159, one doz. black 
Alpine, at 24 00 a doz. 

Of case No. 300, one doz. Leg. 
harvest, at 3 25 a doz. 

The samples were shown by the agent, and 
the prices of the different styles named, and a 
memorandum made by the agent of the num- 
ber of each kind purcha.sed. No memorandum 
was made in writing, and signed by either 
party. When the goods were sent, by ex- 
press, as ordered, defendants refused to re- 
ceive them because the one dozen ha,rvest 
were in some slight particular different from 
the samples shown. Defendants moved for a 
nonsuit because (1) "that the agreement under 
which the plaintiffs seek to recover is within 
the statute of frauds, and void; (2) that the 
order for the goods constitutes one entire eon- 
tract, and the plaintift's have failed to fulfill, 
on their part, to deliver the harvest hats of 
the description ordered; that, by reason of 
said failure, the defendants had a right to 
refuse to receive any of the goods sent." The 
court nonsuited plaintiffs on the last ground. 

Daniel Wood, for appellants. Bowen & Pitbs, 
for respondents. 

EARL, O. The judge at the circuit regard- 
ed this as an entire contract of sale, and not 
severable; and if he was right in this, he 
properly nonsuited the plaintiffs upon that 
ground. If it was an entire contract, within 
the meaniug of the law, the plaintiffs could re- 
cover only by showing entire performance, by 
a fuU delivery of all the articles purchased. 
But it is not necessary, in this case, to deter- 
mine whether this was an entire or a severa- 
ble contract, because the defendants also mov- 
ed for a nonsuit upon the ground that the 
contract of sale was void under the statute of 
frauds. Although tlie judge did not place the 
nonsuit upon this ground, it may be consider- 
ed here. He nonsuited the plaintiffs, and even 
if he gave a wrong reason for it, and placed 
it upon the wrong ground, the nonstiit may be 
upheld upon any ground appearing in the 
case. Curtis v. Hubbard, 1 Hill, 336; Siinar 



V. Canaday, 53 N. Y. 298; Deland v. Richard- 
son, 4 Denio, 05. 

Even if this were a severable contract so far 
as relates to the performance of the same, 
within the meaning of the statute of frauds 
it is an entire contract. The reasons for hold- 
ing it to be such are clearly set forth in Baldey 
V. Parker, 2 B. & C. 41, and Story, Sales, 
§ 241. This, within the meaning of the stat- 
ute of frauds, is a contract for the sale of 
goods for the price of $50 or more, and as 
there was no note or memorandum or pay- 
ment, the question to be determined is, wheth- 
er the goods were accepted and received by 
the buyers so as to satisfy the statute. By 
the terms of the contract, the goods were to 
be delivered to the Merchants' Union Ex- 
press, to be carried to the defendants, and 
they were so delivered. It is well settled that 
when there is a valid contract of sale, a de- 
livery to a carrier, according to the terms of 
the contract, vests the title to the property in 
the buyer. It was decided in Rodgers v. 
Phillips, 40 N. Y. 519, that a delivery, accord- 
ing to the contract, to a general carrier, not 
designated or selected by the buyer, does not 
constitute such a delivery and acceptance a.s 
to answer the statute of frauds. But it has 
been held that when the goods ha\e been ac- 
cepted by the buyer, so as to answer that 
portion of the statute which requires accept- 
ance, a delivery to a carrier selected by the 
buyer will answer that portion of the statute 
which requires the buyer to receive. Cross v. 
O'Donnell, 44 N. X. 001. So far as I can dis- 
cover, it has never yet been decided in any 
case that is entitled to respect as authority, 
that a mere carrier designated by the buyer 
can both accept and receive the goods so as 
to answer the statute. Benj. Sales, 124. The 
cases upon this subject are cited and com- 
mented upon, and the principles applicable to 
the question are so fully set forth in the Uvo 
recent cases above referred to that no fur- 
ther citation of authorities or extended discus- 
sions at this time is important. It will be 
found by an examination of the authorities, 
that in most of the cases where a delivery to 
a carrier has been held to satisfy the stat- 
ute of frauds, there had been a prior ac- 
ceptance of the goods by the buyer or his 
agent. A buyer may accept and receive 
through an agent expressly or impliedly ap- 
pointed for that pmpose. There is every rea- 
son for holding that a designated carrier may 
receive for the buyer, because he is expressly 
authorized to receive, and the act of receiv- 
ing is a mere formal act requiring the exer- 
cise of no discretion. But there is no reason 
for holding that the buyer in such case intend- 
ed to clothe the carrier, of whose agents he 
may know nothing, with authority to accept 
the goods, so as to conclude him as to their 
quality, and bind him to take them as a com- 
pliance with a contract of which such agents 
can know nothing. This case furnishes as 
good an illustration as any. The goods were 
boxed; the carrier could know nothing about 



104 



SALES. 



tbem; and its agents had no right to unpack 
and handle them. Its sole duty and author- 
'.ty was to receive and transport them. In 
such a case, it would be quite absurd to hold 
that the carrier had an implied authority from 
the buyer to accept the goods for him. If the 
buyer does not accept in person, he must do 
it through an authorized agent. Here it is 



not claimed that there was express authority 
conferred upon the carrier to accept, and the 
circumstances are not such that such author- 
ity can be implied. 

Upon this last ground therefore the non- 
suit was proper, and the judgment must be 
affirmed, with costs. 

All concur. 



rORMATIOJS OF THE CON Til ACT— STATUTE OF FRAUDS. 



lOj 



SAFFOIID et al. v. McDONOUGH. 

(120 Mas3. 290.) 

Supreme Judicial Court of Massachusetts. Suf- 
foll£. May 6, 1876. 

T. H. Sweetser and B. P. Hayes, for plain- 
tiffs. S. A. B. Abbott, for defeudant. 

MORTON, J. This is an action of contract 
to recover the price of a quantity of leath- 
er, exceeding fifty dollars in value, alleged 
to have been sold by the plaintiffs to the de- 
fendant. There was no memorandum in 
writing of the conti-act. and the purchaser 
did not give anything in earnest to bind the 
bargain or in pait payment. 

It appeared on the trial that the defend- 
ant on May 17, 1872, went to the plaintiffs' 
store and agreed to purchase the leather at 
the price named, to be paid for by a satis- 
factoi7 note. 

On the thirty-first day of the same month, 
he again went to the plaintiffs' store, ex- 
amined the leather, had it weighed, marked 
with the initials of his name, and piled up 
by itself, to be taken away by him upon giv- 
ing a satisfactory note for the price, or the 
payment of the price in money, but not 
otherwise. He never complied with the 
terms of the agreement. The plaintiffs re- 
fused to allow him to take the leather from 
their store without such compliance, claim- 
ing a lien upon it for the price due. It re- 
mained in then- store till November 9, 1872, 
when it was bm-nt with the store. Upon 
this evidence the presiding justice of the su- 
perior court ruled that the leather had not 
been so accepted and received by the defend- 
ant as to take the contract out of the stat- 
ute of frauds, and the plaintiff excepted to 
such ruling. 

It should be kept In mind that the ques- 
tion is not whether, if a vaUd contract of 
sale upon the terms above named had been 
proved, the title in the property would have 
passed to the defendant, so that it would be 
at his risk. In such a case, the title would 
pass to the purchaser unless there was some 
agreement to the contrary, but the vendor 
would have a lien for the price, and could re- 
tain possession until its payment. Haskins 
V. Warren, 115 Mass. 514; Morse v. Sher- 
man, 106 Mass. 430; Townsend v. Har- 
graves, 118 Mass. 325. But the question is 



whether the defendant had accepted and re- 
ceived the goods, so as to take the case out 
of the statute of frauds, and thus complete 
and make valid the oral contract relied on. 
Unless there was such acceptance and receipt, 
there was no valid contract by virtue of 
which the title to the goods would pass to 
the defendant To constitute this, there 
must be a delivei-y by the seller, and some 
unequivocal acts of ownership or control of 
the goods on the part of the purchaser. 
Knight V. Maun, 118 Mass. 143, and cases 
cited. 

In the case at bar, there was no actual 
acceptance and receipt of the goods by the 
defendant. They were never in his posses- 
sion or control, but remained in the posses- 
sion and control of the plaintiffs, who refused 
to allow him to take them, claiming a lien 
for the price. If they had and asserted a 
lien as vendors, this is inconsistent with the 
delivery of possession and control, necessary 
to constitute an acceptance and receipt by 
the vendee. In Baldey v. Parker, 2 B. & 0. 
37, 44, Holroyd, J., says: "Upon a sale of spe- 
cific goods for a specific price, by parting 
with the possession the seller parts with his 
lien. The statute contemplates such a part- 
ing with the possession, and therefore, as 
long as the seller preserves his control over 
the goods, so as to retain his lien, he pre- 
vents the vendee from accepting and receiv- 
ing them as his own within the meaning of 
the statute." Benjamin on Sales, (.4ni. Ed.) 
151, and cases cited; Browne, St. Fraud, § 317. 

It is ti-ue there may be cases in which the 
goods remain in the possession of the vendor, 
and yet may have been accepted and receiv- 
ed by the vendee. But in such cases the 
vendor holds possession of the goods, not by 
virtue of his lien as vendor, but under somt 
new contract by which the relations of the 
parties are changed. Cusack v. Robinson, 
1 B. & S. 299, 30S; Castle v. Sworder, H. 
& N. 828; Dodsley v. Varley, 12 A. & E. 032. 

In the case at bar, the vendors refused to 
permit the vendee to take possession or con- 
trol of the goods, but claimed and asserted 
thoir lien as vendors for the ijrice. We are 
therefore of opinion that the ruling of the 
superior court was correct. 

Exceptions overniled. 

ENDICOTT and LORD, JJ., absent 



lOG 



SALES. 



CAULKIXS V. HELLMAN. 
(47 N. 1'. 449.) 
Court of Appeals of New York. 1872. 
Action to recover for wines and casks 
sold. 

Steplien K. Williams, for appellant. E. G. 
Latham, for respondents. 

RAPALLO, J. The instructions to tiie 
jury as to tlie legal effect of tlie delivery 
of the wine at Blood's Station in couform- 
•tj- with tlie terms of the verbal contract 
of sale were clearly erroneous. No act of 
the vendor alone, in ijerformance of a con- 
tract of sale void by the statute of frauds, 
can give validity to such a contract. 

Where a valid contract of sale is made 
in writing a delivery pursuant to such con- 
tract at the place agreed upon for deliv- 
ery, or a shipment of the goods in con- 
formity with the terms of the contract, will 
pass the title to the vendee without any 
receipt or acceptance of the goods by him. 
But if the contract is oral, and no part 
of the price is i)aid by the vendee, there 
must be not only a delivery of the goods 
by the vendor, but a receipt and accept- 
ance of them by the vendee to pass the 
title or malie the vendee liable for the 
price; and this acceptance must be volim- 
lary and unconditional. Even the receipt 
of the goods, without an acceptance, is not 
suflicient. Some act or conduct on the part 
of the vendee, or his authorized agent, man- 
ifesting an intention to accept the goods 
as a performance of the contract, and to 
appropriate them, is required to supply the 
place of a written contract. This distinc- 
tion seems to have been overlooked in tne 
charge. The learned judge instructed the 
jury, as a matter of law, that if they were 
satislifd that the wine or any portion of it 
was actually delivered in pur.suauce of the 
verbal contract, that circumstance was suf- 
ficient to take the contract out of the 
Hialuto of frauds, and the contract was a 
valiil one, and might be enforced notwitli- 
standiug It was not In writing. The at- 
tention of the jury was directed to the In- 
<pili-y whcllior the plalntilV.s had faithfully 
perfnrnicd their part of tlie contract rallicr 
than to the action of tlio dcfcndiuil. and llio 
Judge proceeded to state tliat If the wine 
was delivered to the express company at 
lllood'H Station In good order, In merclianl- 
ablo condition, and corrcspondi'd In tjnal- 
lly anil all subslaiilial and material rcspcrts 
with the samples, then ho Inslructeil the 
jury as a matter of law, that If they found 
llic contract as Ciordon trstlUcd with re- 
spcct to the place of delivery, that was n 
c'ompletc delivery under the contract, and 
liaHNcd the title from the plaliitin's to the 
defendant, and the plalntHTs were entitled 
to recover the contract price of tlie wines. 

The plalnlllT'M roiiiiHcl HUggesIs in the 
gtntement of facts npiiciided to his ixtliitu, 



that Gordon was the agent of the dcl'oini- 
ant, to accept the goods at Blood's Station. 
But this statement is not borne out by 
the evidence; Gordon was the agent of the 
plaintill's for the sale of the goods; it was 
incumbent upon them to make the ship- 
ment. All that Gordon testiiies to is that 
the defendant requested him to make the 
best bargain he could for the freight. He 
does not claim that he had any authority 
to accept the goods for the defendant. 

According to the defendant's testimony 
Gordon clearly had no such authority, nor 
did the defendant designate any convey- 
ance, and tlie judge submitted no question 
to the jury as to the authority either of 
Gord6n or the express company to accept 
the goods. On the contrary, he repeated 
thai if when the wine was delivered at 
Blood's Station it was in good order and 
corresponded with the samples, the plain- 
tiffs would be entitled to a verdict for the 
contract price, upon the ground tliat the 
parties by the contract (assuming it to be 
as claimed by the plaintiffs), fixed upon 
that station as the place of delivery; "that 
it was true that the defendant was not 
there to receive it, and had no agent at 
Blood's Station to receive it, and had no 
opportunity to inspect it there; but that 
that was a contingency ho had not seen, 
and which he might have guarded against 
in the contract." 

It is evident that the learned judge ap- 
plied to this case the rule as to delivery, 
which would be applicable to a valid, writ- 
ten contract of sale, but which is inappli- 
cable when the contract is void by the 
statute of frauds. 

The effect of the delivery of goods at a 
railway station, to be forwarded to the 
vendee in pursuance of the terms of a 
verbal contract of sale, was very fully dis- 
cussed in the case of Norman v. i'hilliiis. 
II :\Iees. & W. •J77. and a verdict for the 
plaintiff founded upon such a delivery, and 
upon the additional fact that the vendor 
sent an invoice to the vendee, which lie 
retained for several weeks, was set aside. 
Tlie English authorities on the subject are 
reviewed In that case, and the American 
and Ijiigllsh authorities bearing upon the 
sjime question are also referred to In the 
bile cases of Hodgers v. rhilllps, -10 N. Y. 
r.l'J, and Cross v. O'Doniiell, 44 N. Y. 001. 
The latter case is cited by the counsiU for 
the pl;iliiliffs as an authority for the prop- 
osition that a <lellvery to a designated car- 
rier Is sulllcli'iit to take the ca.se out of 
the statute; but It does not so decide. It 
liolds only tliat the receipt and acceptance 
need not be simultaneous, but that they 
may take |)lace at different times, and 
lli.'it after the purchaser had himself In- 
HlHM'ted and accepted the goods purcha.sed, 
the dellverj' of them by his direction to a 
designated carrier was a good delivery, and 
the carrier was the agent of the purchaser 



POllMATION OF Tin: CONTRACT— STATUTE OF FRAUDS. 



1U7 



to receive them. No question however aris- 
es in the present case as to a deUver.v to a 
designated carrier, as the evidence in re- 
.'ipect to the agreed mode of delivery is con- 
Uicting, and no ijuestiou of acceptance by 
the carrier as agent for the defendant was 
submitted to the jury. 

The judge submitted to the jury two 
<luestions, to which he required specific an- 
swers. 

1st. Was the wine delivered at the rail- 
road station at the time agreed upon by 
tile parties, and was it then in all respects 
in good order, and like the samples exhib- 
ited by the plaintiff to the defendant V and, 

2d. Was the wine accepted by the de- 
fendant after it reached his place of busi- 
ness in New York? 

The jury answered both of these ques- 
tions in the affirmative, and it is now claim- 
ed that the answer to the second question 
renders immaterial any error the judge 
niay have committed in respect to the ef- 
fect of the delivery at the station. 

It is difficult to find any evidence justify- 
ing the submission to the jury of the see 
ond question; but no exception was taken 
to such submission. The motion for a non- 
suit would have raised that point, were it 
not for the fact that there was evidence to 
go to the jury on the claim of $52 for bar- 
rels, and this precluded a nonsuit. We 
think however that the error in the charge 
may have misled the jury in passing upon 
the second question; at all events, it is not 
impossible that it should have done so. 
Having been instructed that upon the fact 
as they found it in respect to the agree- 
ment for a delivery at Blood's Station, the 
title to the goods had passed to the de- 
fendant before the receipt of them at New 
York, and that their verdict must be for 
the plaintilfs, they may have examined the 
question of his acceptance of them at New 
York with less scrutiny than they would 
have exercised had they been informed tliat 
the result of the case deiiended upon their 
finding on that question. And the construc- 
tion of the defendant's acts and language 
may, in some degree, have been influenced 
by the consideration that when the wine 
arrived in New York the title had, accord- 
ing to the theory on which the case was 
submitted to them, passed to the defend- 
ant, and he had no right to reject the wines. 
Furthermore, we think the judge erred in 
excluding the evidence of the contents of 
the telegram which the defendant attempt- 
ed to send to the plaintiffs immediately up- 
on the receipt of the wine. If, as was of- 
fered to be shown, it stated that he de- 
clined to accept the wine, it was material 
as part of the res gestse. A bona fide at- 
tempt, immediately on the receipt and ex- 
amination of the wine, to communicate 



such a message, was an act on his part 
explaining and qualifying his conduct in 
receiving the wine into his store and al- 
lowing it to remain there. And even though 
the message never reached the plaintiffs, it 
bore upon the question of acceptance by 
the defendant. The objection to the evi- 
dence of the contents of the telegram was 
not placed on the ground of omission to 
produce the original, and the judge in his 
charge instructed the jury that the at- 
i tempt to send this telegram did not affect 
I the plaiutiffs' rights, for the reason that it 
j was not shown to have been received by 
[ them, and this was excepted to. In Norman 
j V. Phillii)s, 14 Mees. & W. 277, the de- 
j fendant was allowed to prove that on being 
I informed by the railway clerk that the 
goods were lying for him at the station, he 
said he would not take them, and stress 
' was laid upon the fact. Yet this statement 
to the clerk was not communicated to the 
plaintiffs. Evidence of an attempt to send 
a message to them to the same effect, 
though unsuccessful, would have been no 
more objectionable than the declaration to 
the clerk. The acts of the defendant at 
! the time of the receipt of the goods, and 
his bona fide attempt to communicate to 
the plaintiffs his rejection of them were I 
think material and competent to rebut any 
presumption of an acceptance arising from 
their retention by him. 

The judge was requested to instruct the 
jury that the true meaning of the defend- 
ant's letter of March 31 was a refusal to 
accept the wine under the contract. A care- 
ful examination of that letter satisfies us 
that the defendant was entitled to have the 
jury thus instructed. The letter clearly 
shows that the defendant did not accept 
or appropriate the wines. After complain- 
ing in strong language of their quality and 
I condition, and of the time and manner of 
j their shipment, he says to the plaintiffs, 
"What can be done now with the wine after 
it sult'ered so much, and shows itself of 
such a poor quality? I don't know myself 
and am awaiting your advice and opinion." 
He concludes by expressing his regret that 
their first direct transaction should have 
turned out so unsatisfactory, and by stat- 
ing that he cannot be the sufferer by it, 
and he awaits their disposition. 

This language clearly indicates an inten- 
tion to throw upon the plaintiffs the re- 
STiousibility of directing what should be 
done with the wine, and is inconsistent 
with any acceptance or appropriation of 
it by the writer. 

For these reasons the judgment should 
be reversed, and a new trial granted, with 
costs to abide the event. 
All concur. 
Judgment reversed. 



108 



SALES. 



HOWE V. HAYWARD. 

(lOS Mass. 54.) 

Supreme Judicial Court of Massachusetts. 
Worcester. Oct. Term, 1871. 

T. G. Kent, for plaintiff. P. E. Aldrich, for 
defendant 

CHAPMAN, C. J. It appears by the report, 
that the parties made an oral contract for 
the sale of property by the plaintiff to the 
defendant, and that each of Ihein deposited 
the sum of §200 in the hands of one Tatt. 
The plaintiff contended that the money de- 
posited by the defendant was given in earn 
est to bind the bargain, or in part payment 
The defendant contended that it was under 
an agreement that the sum should be for- 
feited in case he refused without just cause 
to perform the contract. The jury found 
that it was not deposited in earnest or In 
part payment, but was deposited "as a for- 
feiture, to be paid over to the party who was 
ready to perform the contract, if the other 
party neglected to do so;" and under the in- 
struction of the court found for the defend- 



ant. The plaintiff contends that the find- 
ing should have been for the plaintiff, be- 
cause. If the money was deposited as a for- 
feiture, as stated, it amounted to "earnest" 
within the meaning of the statute of frauds. 
This depends upon the proper definition of 
that term as used in the statute. 

The idea of "earnest," in connection with 
contracts, was taken from the civil law. 
Guterbock on Bracton (Am. tran.sl.) 145. It 
is not necessary to consider its precise ef- 
fect under that law. As used in the statute 
of frauds, "earnest" is regarded as a part 
payment of the price. 2 Bl. Comm. 447; 
Pordage v. Cole, 1 Saund. olOi; I^ingfort v. 
Tiler, 1 Salk. 113; Morton v. Tibbett, 15 Q. 
B. 42S; Walker v. Nussey. 16 M. & W. :!02; 
1 Dane, Ab. 235. The case of Blenkinsop v. 
Clayton, 7 Taunt. 597, cited by the plaintiff', 
turned on the question of delivery. 

The deposit with Taft was not therefore 
equivalent to an earnest to bind the bar- 
gain, or part payment, and there was not a 
valid sale within the statute of frauds. The 
ruling was correct. 

Judgment an the verdict. 



POllMATJOK or THE CONTKACT— STATUTE OF EKAUDS. 



109 



BUTLER V. THOMSON et aL 

(92 V. S. 412.) 

Supreme Court of the United States. Oct. 
Term, 1875. 

Error to the circuit court of the United 
States for tlie Southern district of New 
Yorl£. 

Mr. William M. Evarts for the plaintiff 
in error. Mr. E. H. Owen, contra. 

Mr. .Justice HUNT delivered the opinion of 
the court. 

The plaintiff alleged that on the eleventh 
day of July, 1867, he bargained and sold to 
the defendants a quantity of iron thereafter 
to arrive, at prices named, and that the de- 
fendants agreed to accept the same, and pay 
the purchase-money therefor; that the iron 
arrived in due time, and was tendered to 
the defendants, who refused to receive and 
pay for the same; and that the plaintiff aft- 
erwards sold the same at a loss of $6,581, 
which sum he requires the defendants to 
make good to him. The defendants inter- 
posed a general denial. 

Upon the trial, the case came down to this: 
The plaintiff employed certain brokers of the 
city of New York to make sale for him of 
the expected iron. The brokers made sale 
of the same to the defendants at 12% cents 
per pound in gold, cash. 

The following memorandum of sale was 
made by the brokers; viz.: — 

"New York, July 10, 1867. Sold for Messrs. 
Butler & Co., Boston, to Messrs. A. A. Thom- 
son & Co., New York, seven hundred and 
five (705) packs first-quality Russia sheet- 
iron, to an-ive at New York, at twelve and 
three-quarters (12%) cents per pound, gold, 
cash, actual tare. Iron due about Sept. 1, 
'67. White & Hazzard, Brokers." 

The defendants contend, that, under the 
statute of frauds of the state of New York,, 
this contract is not obligatory upon them. 
The judge before whom the cause was tried 
at the circuit concurred in this view, and 
ordered judgment for the defendants. It is 
from this judgment that the present review 
is taken. 

The provision of the statute of New York 
upon which the question arises (2 R. S. 
p. 136, § 3) is in these words:— 

"Every contract for the sale of any good.s, 
chattels, or things in action, for the price of 
fifty dollars or more, shall be void, unless (1) 
a note or memorandum of such contract be 
made in writing, and be subscribed by the 
parties to be charged thereby; or (2) unless 
the buyer shall accept and receive part of 
such goods, or the evidences, or some of 
them, of such things in action; or (3) unless 
the buyer shall at the time pay some part 
of the purchase-money." 

The eighth section of the same title pro- 
vides that "every instrument required by 



any of the provisions of this title to be sub- 
scribed by any party may be subscribed by 
the lawful agent of such party." 

Tliere is no pretense that any of the goods 
wore accepted and received, or that any part 
of the purchase-money was paid. The ques- 
tion arises upon the first branch of the stat- 
ute, that a memorandum of the contract shall 
be made in writing, and be subscribed by the 
parties to be charged thereby. 

The defendants do not contend that there 
is not a sufficient subscription to the con- 
tract. White & Hazzard, who signed tlie in- 
strument, are proved to have been the au- 
thorized agents of the plaintiff to sell, and 
of the defendants to buy; and their signa- 
ture, it is conceded. Is the signature both of 
the defendants and of the plaintiff. 

The objection is to the sufficiency of the 
contract itself. The written memorandum 
recites that Butler & Co. had sold' the iron 
to the defendants at a price named; but it 
is said there 'S no recital that the defendants 
had bought the iron. There is a contract of 
sale, it is argued, but not a contract of pur- 
chase. 

As we understand the argument, it is an 
attack upon tlie contract, not only that it is 
not in compliance with the statute of frauds. 
but that it is void upon common-law princi- 
ples. The evidence required by the statute 
to avoid frauds find perjuries— to wit, a writ- 
ten agreement — is present. Such as it is, the 
contract is sufficiently established, and pos- 
sesses the evidence of its existence required 
by the statute of frauds. 

The contention would be the same if the 
articles sold had not been of the price named 
in the statute; to wit, the sum of fifty dol- 
lars. 

Let us examine the argument. Blackstone"s 
definition of a sale is "a transmutation of 
property from one man to another in con- 
sideration of some price." 2 Bl. 446. Kent's 
is, "a contract for the transfer of property 
from one person to anotlier." 2 Kent, 615. 
Bigelow, C. J., defines it in these words: 
"Competent parties to enter into a contract, 
an agreement to sell, the mutual assent of 
the parties to the subject-matter of the sale, 
and the price to be paid therefor." Gard- 
ner V. Lane, 12 Allen, 39, 43. A learned au- 
thor says, "If any one of the ingredients 
be wanting, tliere is no sale." Atkinson, 
Sales, 5. Benj. Sales, p. 1, note, and p. 2. 
says, "To constitute a valid sale, there must 
be (1) parties competent to contract; (21 
mutual assent; (3) a thing, the absolute or 
general property in which is transferred 
from the seller to the buyer; (4) a price in 
money, paid or promised." 

How, then, can there be a sale of seven 
hundred and five packs of iron, unless there 
be a purchase of It? How can there be a 
seller, unless there be likewise a purchaser. 
These authorities require the existence of 
both. Tlie essential idea of a sale is that of 
an agreement or meeting of minds by which 



no 



SALES. 



:i title passes from one. and vests in another. 
A man cannot sell his chattel by a perfected 
sale, and still remain its owner. There may 
be an offer to sell, subject to acceptance, 
which would bind the party offering, and 
not the other party uniil acceptance. The 
same may be said of an optional purchase 
upon a sufficient consideration. There is 
also a class of cases under the statute of 
frauds where it is held that the party who 
has signed the contract may be held charge- 
able upon it, and the other party, who has 
not furnished that evidence against himself, 
will not be thus chargeable. Unilateral con- 
tracts have been the subject of much discus- 
sion, which we do not propose here to reiieat. 
In Thornton v. Kempster, 5 Taunt. 7SS. it is 
said,— 

"Contracts may exist, which, by reason of 
the statute of frauds, could be enforced by 
one party, although they could not be en- 
forced by the other party. The statute of 
frauds in that respect throws a difficulty in 
the way of the evidence. The objection does 
not interfere with the substance of the eon- 
tract, and it is the negligence of the other 
party that he did not take care to obtain 
and preserve admissible evidence to enable 
himself also to enforce it." 

The statute of 29 Car. II., c. 3, on which 
this decision is based, that "no contract for 
the sale of goods, wares, and merchandise, 
for the price of £10 sterling or upwards, shall 
lie allowed to be good except the buyer," &c., 
is in legal effect the same as that of the 
statute of Xew York already cited. See .Jus- 
tice v. I,ang, 42 N. Y. 4'J3, that such Is the 
effect of the statute of New Y'ork. 

The case before us does not fall within this 
class. There the contract is signed by one 
party only; here both have signed the paper; 
and, if a contract Is crcaled, it is a mutual 
one. Both are lialile, or neither. 

I.'ndor these authorities, it seems dear 
that there can be no sale unless there is a 
pui-chase, as theie can be no jnircliase un- 
less there be a sale. When. Iherefore, the 
parties mutually certify and declare In writ- 
ing that Butler & Co. have sold a certain 
amount of Iron to Thomson & Co. at n price 
named, there Is included (herein a certldcate 
and di'djiratlon that 'ninnisun & Co. have 
bought the Iron at that price. 

In Newell v. Kadfi.rd. I.. U. .T C. P. 52. the 
nieiiiDrandiini w.ms In thi-se words: "Mr. II., 
"." .>ia<'U« culasscs nt .''.'.is.. "MO lbs., to wait or- 
ders;" signed, ".lohn Wllllnins." It was ob- 
Jci'tfd that If was Imiiosslble to tell from 
this meiiioraiidiini which party was the buy- 
er, and which wmh the wcller. I';irol proof 
of llio Hituiitlon of the parties was roci'lvod, 
and that A\'llllaiiiH was the defendant's 
agent, and made theonlry In the plnlntirT's 
1kk)I(h. In nnnwer to the objection the court 
pay, "The plnlntllT was a linker, who would 
reipilre the flour, and the defi-ndant u per- 
Kon who was In llie habit of selilrig If;" and 
the plalntllT recovered. It may be notli-ed. 



also, that the memorandum in that case 
was so formal as to contain no words either 
of purchase or sale ("Mr. H., 32 sacks culas- 
ses at 30s., 2S0 lbs., to wait orders"); but it 
was held to create a good contract upon the 
parol evidence mentioned. 

The subject of bought aud sold notes was 
elaborately discussed in the case of Sivew- 
right V. Archibald, 6 Eng. L. & Eq. 2S6; s. c. 
17 Q. B. 103; Benj. on Sales, p. 224, sect. 290. 
There was a discrepancy in that case be- 
tween the bought and sold notes. The sold 
note was for a sale to the defendant of "500 
tons Messrs. Dunlop, Wilson, & Co.'s pig- 
iron." The bought note was for "500 tons of 
.Scotch pig-iron." The diversity between the 
bought and sold notes was held to avoid the 
contract. It was held that the subject of 
the contract was not agreed upon between 
the parties. It appeared there, and the cir- 
cumstance is commented on by Mr. Justice 
Patteson, that the practice is to deliver the 
bought note to the buyer, and the sold note 
to the seller. He says, "Each of them, in 
the language used, purports to be a repre- 
sentation by the broker to the person to 
whom it is delivered, of what he, the broker, 
has done as agent for that person. Surely 
the bought note delivered to the buyer can- 
not be said to be the memorandum of the 
contract signed by the buyer's agent, in or- 
der that he might be bound thereby; for 
then it would have been delivered to the 
seller, not to the buyer, and vice versa as to 
the sold note." 

The argument on which the decision be- 
low, of the ca.se we are considering, was 
based, is that the contract of sale is dis- 
tinct from the contract of purchase; that to 
charge the purchaser, the suit should be 
brought upon the bought not(>; and that the 
purchaser can only be nold where his agent 
has signed and delivered to the other party 
a bought note,— that is, an Instrument ex- 
pressing that he has bought and will pay 
for the articles specified. Mr. .luslice Pat- 
teson answers this by the statement that the 
bought note Is always delivered to the buyer, 
and the sold note to the seller. The plain 
tiff here has the signature of both parties, 
and the counterpart delivered to him. and 
on which he brings his suit, is, according to 
Mr. .Justice Patteson, the proper one for that 
pin-pose,- that is, the sold note. 

We do not dh-cover In .Justice v. I.ang, re- 
ported In 42 N. Y. 4!>:i. and again In .-)2 N. Y. 
.'(23, any thing that conlllcts with the views 
we have f\]>vi ssed, or that gives material 
aid In deciding the points we have discussed. 

The memoi-aiidum In question, expressing 
IliJlt the Iron had been sold, Imported nec- 
essarily that It lia<l boon bought. The con- 
tract was signed by the agent of both par- 
tloH, (he buyer and the seller, and In our 
o|ilidon was a jierfect contract, obligatory 
u|)iin both the parties thereto. 

.Indginent reversed, and cause remanded 
for a new triaL 



rOHMATION OF THE CONTRACT— STATUTE OF FRAUDS. 



Ill 



SANBOKN et al. v. FLAGLEIt. 

(9 Allen, 474.) 

Supreme Judicial Court of Massachusetts. 

Nov., 1SI>4. 
Contract broujjlit by plaintiffs, who were part- 
ners under the firm name of Sanborn, Richard- 
son & Co., against .lulm H. Flakier and 

Holdane, as partners under the firm name of 
Holdane & Co. The writ was served only upon 
Flagler. The plaintiffs alleged that the de- 
fendants had refused to deliver to them fifty 
tons of best refined iron, in accordance with a 
written agreement entered into between them. 
The defendant set up among other defenses the 
statute of frauds. One of the plaintiffs was 
ralK'd to the stand, and produced to be offered 
in evidence a paper, of which the following is 
a copy as near as can be made: 

"Will deliver S. R. & Co. best refined iron 
50 tons within 00 days— at T^ ct p lb 4 of cash. 
Plates to be 10 to Ki inches wide and 9 ft to 
11 long. This offer good till 2 o'clock Sept. 11, 
1802. J. H. P. J. B. R." 

The defendant objected that the paper was 
not a sufficient memorandum in writing of the 
alleged bargain signed by the party to be char- 
ged, and that parol evidence was not admissi- 
ble so as to make it such a memorandum as 
could be admitted. The judge ruled that the 
paper was a sufficient memorandum, and would 
bind the defendant if he was a member of the 
firm of Holdane & Co. The witness then tes- 
tified that the agreement was written by him, 
and that he and the defendant signed their ini- 
tials, the defendant writing the initials "J. H. 
F.," and he the initials "J. B. R.;" and that 
before the defendant left the plaintiffs' oiflce, 
and before 2 o'clock, he accepted the proposi- 
tion, and so stated to the defendant verbally. 
The witness testified that he signed his initials 
on behalf of the plaintiffs, and that he under- 
stood the defendant to sign for the firm of 
Holdane & Co. This evidence was not de- 
nied by the defendant. The judge ruled that 
said paper, with the explanation given, if 
Richardson was believed, was a sufficient note 
or memorandum, and was binding on the de- 
fendant if the juiT found him to be a partner 
as alleged. The jury found a verdict for the 
plaintiffs, and the defendant alleged excep- 
tions. 

A. A. Ranney, for plaintiffs. C. T. Russell, 
for defendant. 

BIGELOW, C. J. The note or memoran- 
dum on which the plaintiffs rely to maintain 
their action contains all the requisites essential 
to constitute a binding contract within the 
statute of frauds. It is not denied by the de- 
fendant that a verbal acceptance of a written 
offer to sell merchandise is sufficient to consti- 
tute a complete and obligatory agreement, on 
which to charge the person by whom it is sign- 
ed. In such case, if the memorandum is oth- 
erwise sufficient when it is assented to by him 
to whom the proposal has been made, the con- 
tract is consummated by the meeting of the 



minds of the two parties, and the evidence 
necessary to render it valid and capable of en- 
forcement is supplictl by the signature of the 
party sought to be charged to the offer to sell. 
Indeed, the rule being well settled that the 
signature of the defendant only is necessary to 
make a binding contract within the provisions 
of the statute relating to sales of merchandise, 
it necessarily follows that an offer to sell and 
an express agreement to sell stand on the same 
footing, inasmuch as the latter, until it is ac- 
cepted by the other party, is in effect nothing 
more th;m a proposition to sell on the terms 
indicated. The acceptance of the contract by 
the party seeking to enforce it may always be 
proved by evidence aliunde. 

The objections on which the defendants rely 
are twofold. The first is that the note or 
memorandum does not set forth upon its face, 
in such manner as to be understood by the 
court, the essential elements of a contract. 
But this position is not tenable. The nature 
and description of the merchandise, the quan- 
tity sold, the price to be paid therefor, the 
terms of payment, and the time within which 
the article was to be delivered, are all clearly 
set forth. But it is urged that the paper does 
not disclose which of the parties is the pur- 
chaser and which the seller, and that no pur- 
chaser is in fact named in the paper. This 
^^■ould be a fatal objection if well founded. 
There can be no contract or valid memoran- 
dum of a contract which does not shew who 
are the contracting parties. But there is no 
such defect in the note or memorandum held 
by the plaintiffs. The stipulation is explicit to 
deliver merchandise to S. R. & Co. It cer- 
tainly needs no argument to demonstrate that 
an agreement to deliver goods at a fixed price 
and on specified terms of payment is an agree- 
ment to sell. Delivery of- goods at a stipu- 
lated price constitutes a sale; an agreement 
for such delivery is a contract of sale. Nor 
can there be any doubt raised as to the in- 
trinsic import of the memorandum concerning 
the character or capacity in which the parties 
are intended to be named. A stipulation to 
deliver merchandise to a person clearly indi- 
cates that he is the purchaser, because in every 
valid sale of goods delivery must be made by 
the vendor to the vendee. We can therefore 
see no ambiguity in the insertion of the name 
of the purchaser or seller. The case is much 
stronger in favor of the validity of the memo- 
randum in this respect than that of Salmon 
Falls Manuf. Co. v. Goddard. 14 How. 440. 
There only the names of the parties were in- 
serted, without any word to indicate which 
was the buyer and which was the seller. It 
was this uncertainty in the memorandum 
which formed the main ground of the very 
able dissenting opinion of Mr. Justice Curtis 
in that case. So in the leading case of Bailey 
V. Ogden, 3 Johns. 399, there was nothing in 
the memorandum to shew which of the two 
parties named agreed to sell the merchandise. 
But in the case at bar, giving to the paper a 
rea.sonable intenuetation, as a brief document 



112 



SALES. 



di-awn up In tlie haste of business and intend- 
ed to express in a few words the terms of a 
bargain, we cannot entertain a doubt that it 
indicates with sufficient clearness that the 
plaintiffs were the purchasers, and the defend- 
ant the seller of the merchandise, on the terms 
therein expressed. Indeed we can see no rea- 
son why a written agreement by one party to 
dehver goqds to another party does not as clear- 
ly shew that the latter is the purcha.ser and 
the former the seller as if the agreement had 
been in express terms by one to sell goods to 
the other. 

The other objection to the memorandum Is 
that the name of the party sought to be char- 
ged does not appear on the face of the paper. 
If by this is meant that the signatures of all 
the pei'sons who are named as defendants are 
not atlixed to the memorandum, or that it is 
not signed with the copartnership name under 
which it is alleged that the persons named as 
defendants do business, the fact is certainly so. 
But it is not essential to the validity of the 
memorandum that it should be so signed. An 
agent may write his o^vn name, and thereby 



bind his principal; and parol evidence is com- 
jietent to prove that he signed the memoran- 
dum in his capacity as agent. On the same 
principle, a partner may by his individual sig- 
nature bind the firm, if the contract is within 
the scope of the business of the firm, which 
may be shewn by extrinsic evidence. Soames 
V. Spencer, 1 D. & E. 32; Long, Sales, 3S; 
Browne, St. Fraud, § 367; Higgins v. Senior, 
S U. & W. 834; Williams v. Bacon, 2 Gray, 
3S7, 393. Besides, in the case at bar. the ac- 
tion is in effect against Flagler alone. He 
only has been served with process and appears 
to defend the action. Whether he signed as 
'agent for the firm or In his individual capacity 
is innnaterial. In either aspect he is liable 
on tlie contract. 

It is hardly necessary to add that the signa- 
ture is valid and binding, though made with 
the initials of the party only, and that parol 
evidence is admissible to explain and apply 
them. Phillimore v. Barry, 1 Camp. 513; Sal- 
mon Falls JIanuf. Co. v. Goddard, ubi supra; 
Barry v. Combe, 1 Pet 640. Exceptions over- 
ruled. 



EFFECT OF TIJK CON Tli ACT— SALE OF SPECIFIC CHATTEL. 



ii;j 



COMMONT\'EALTH v. FLEMING. 
(18 Atl. Rep. 622, 130 Pa. St. 138.) 

Siiprpme Court of Pennsylvania. Nov. 4, ISSO. 

Error to court of quarter sessions, Mercer 
county. 

The pliiintilT in error, Joseph Fleming, be- 
ing a wluilcsiile liquor dealor, licensed and 
carrying,' on bii.siness in Alleglii/ny county, 
sold and sent from his place of business, 0. 
O. D., to Moreer county, wliero he had no li- 
cense, liquors ordered by persons in the latter 
county. For this he was, at the court of 
quarter .ses.sions of Mercer county, indicted, 
tried, convicted, and sentenced for selling 
liquor therein without a license. He now 
brings error. 

i3eioie Paxson, C. J., Stekrett, Green, 
Clakk, Williams, McCollum and Mitch- 
ell, JJ. 

Georfje Shiras, Jr., a)id William S. Pier, 
for plaintiff in error. 6? W. McBride, Dist. 
Atty., /. A. atranahan, and S. H. Miller, 
for the Commonwealth. 

GUEEX, J. In the case of Garbracht v. 
Com., 96 Pa. St. 449, wliich was an indict- 
ment for selling liquor without license, we 
lield that "the place of sale is the point at 
wliich goods ordered or purchased are set 
apart and delivered to the purcliasfr, or to a 
common carrier, who, for the purposes of de- 
livery, represents him." In tiiat case the or- 
der for the liquor was solicited and obtained 
by tlie defendant in the county of Mercer, but 
was sent to his principal, who was a liquor 
dealer in the county of Erie. The order was 
executed by the principal, who, in the county 
of Erie, at his place of business, separated or 
set apart from his general stock the licjuor 
ordered, and delivered it to a common carrier 
to be forwarded to its destination in Mercer 
County. We decided that this was no viola- 
tion of the law prohibiting sales without li- 
cense, althongli neither the defendant, who 
was a traveling agent, nor his principal held 
any license for the sale of liquor in Mercer 
county. This decision was not changed in 
the least upon a subsequent trial of the same 
defendant on a different state of facts, as re- 
ported in 1 I'enny. 471. In the case now un- 
der consideration the liquor was sold upon 
oiders sent by mail by the purchasers, living 
in Mercer county, to the defendant, who is a 
wholesale liquor dealer in Allegheny county. 
The goods were set apart at the defendant's 
place of business in Allegheny county, and 
were there delivered to a common carrier, 
consigned to the purchaser at his address in 
Mercer county, and by the carrier transported 
to Mercer county, and there delivered to the 
purchaser, who paid tiie expense of trans- 
portation. Upon these facts alone, the de- 
cision of this court in the Case of Garbracht, 
supra, is directly and distinctly applicable, 
and requires us to reverse the judgment of 
the court below, unless there are other facts 

GRIF. PEKS.PROP. — 8 



in the case which distinguish it from that of 
Garbracht. 

It is claimed, and it was so held by the 
court below, that, because the goods were 
niarUed "C. O. D.," the sale was not complete 
until the delivery was made; and as tliat took 
place in Mercer county, where the defendant's 
license was inoperative, he was without li- 
cense as to such sales, and becan)e subject to 
the penalty of the criminal law. The argu- 
ment by which this conclusion was reached 
was simply that the payment of the price was 
a condition precedent to the delivery, and 
hence there was no delivery until payment, 
and no title passed until delivery. The legal 
and criminal inlerence was, the sale was made 
in Mercer, and not in Allegheny. This rea- 
soning ignores certain facts which require 
consideration. The orders were sent by the 
purchasers, in Mercer, by mail to tlie seller, 
in Allegheny, and in the orders the purchas- 
ers requested the defendant to send the goods 
C. O. I). The well-known meaning of such 
an order is that the price of tlie goods is to be 
collected by the carrier at the lime of the de- 
livery. The purchaser, for his own conven- 
ience, requests the seller to send him the 
goods, with authority in the carrier to receive 
tlie money for them. This method of pay- 
ment is the choice of the purchaser, under 
sucli an order; and it is beyond ipiestion that, 
so far as the puicliaser is concerned, the car- 
rier is his agent for the receipt and transmis- 
sion of the money. If the seller accedes to 
such a request by the purchaser, he certainly 
authorizes the purcliaser to pay the money to 
the carrier, and tlie purcliaser is relieved of 
all liabilities to the seller for the price of the 
goods if he pays the price to the carrier. The 
liability for the price is transferred from the 
seller to the carrier; and whether the carrier 
receives the price or not, at the time of deliv- 
ery, he is liable to the seller lor the price if he 
does deliver. Substantially, therefore, if the 
delivery is made by the carrier, and he chouses 
to give credit to the purchaser for the pay- 
ment of the price, the transaction is complete, 
so far as the seller is concerned, and the pur- 
chaser may hold the goods. Of course, if the 
seller were himself delivering the goods in 
parcels upon condition that on delivery of the 
last parcel the price of the wliole should be 
paid, it would be a fraud on the seller if the 
purchaser, after getting all the parcels, should 
refuse to perform the condition upon which 
he obtained them, and in such circumslances 
the seller would be entitled to recover the 
goods. This was the case in Henderson v. 
Lauck, 21 Pa. St. .359. The court below, in 
that case, expressly charged that if the seller 
relied on the promise of the purchaser to pay, 
and delivered the goods absolutely, the right 
to the property was changed, although the 
conditions were never performed; but if he 
relied, not on the promise, but on actual pa}-- 
ment at the delivery of the last load, he might 
reclaim the goods if the money was not paid. 
The case at bar is entirely different. So far 



114 



SALES. 



as the seller is concerned, he is satisfied to 
take the responsibility of the carrier for tlie 
price, in place of that of the seller. He au- 
thorizes the purcliaser absolutely to pay the 
price to the carrier; and, if lie does so, un- 
doubtedly thfe purchaser is relieved of all re- 
sponsibility for the price, whether the carrier 
ever pays it to the seller or not. But the car- 
rier is also authorized to deliver the goods. 
If he does so, and receives the price, he is of 
course liable for it to the seller. 15 ut he is 
equally liable for the price if he chooses to de- 
liver the goods without receiving the price. 
It cannot be questioned that the purchaser 
would be liable also; but, as he had received 
the goods from one who was authorized to de- 
liver them, his right to hold them even as 
against the seller is undoubted. In other 
words, the direction embodied in the letters 
"C. O.D.," placed upon a package committed 
to a carrier, is an order to the carrier to col- 
lect the money for the package at the time of 
its delivery. It is a part of the undertaking 
of the carrier with the consignor, a violation 
of which imposes upon the carrier the obliga- 
tion to pay the price of the article delivered, 
to the consignor. We have been referred to 
no authority, and have been unable to discov- 
er any, for the proposition that in such a case, 
after actual, absolute delivery to the purchas- 
er by the carrier without payment of the 
price, the seller could reclaim the goods from 
tlie purchaser as upon violation of a condition 
pri'cedent. 

if, now, we pause to consider the actual 
contract relation between the seller and pur- 
chaser, where the purchaser orders the goods 
to be sent to him C. O. ])., the matter be- 
comes still more clear. U|ion such an order, 
if it is accepted by the seller, it becomes the 
duty of the seller to ileliver the goods to the 
carrier, with instruction to the carrier to col- 
lect the piice at the time ot delivery to the 
)iurchascr. In such a case it is the duty of 
the purchaser to receive the goods from the 
carrier, and, at the time of receiving them, 
to pay the price to tlie carrier. This is the 
whole of tlio contract, so far as the seller and 
the purchaser are concerned. It is at once 
apjiarent that when the seller has delivered 
the goods to the carrier, with the instruc- 
tion to collect the price on delivery to tlie 
purchaser, he has performed his whole duly 
undrr the con tract; he has nothing more to do. 
It the [lurchaser fail to perform liis jiart of 
the contract, the seller's right of action is 
comph-le; and he may recover the price of the 
goods from the purchaser, where the pur- 
chanor takes, or refuses to take, the goods 
from the carrier. Hence it follows that the 
paKs.igo of the title to Hie purchaser is not 
pssi-ntial to tlie legal comjiletcness of the con- 
tract of sale. It is, in fact, no ?nore than the 
ordinary case of a contract of sale, wherein 
the seller tenders delivery at Hie time and 
place of delivery agreed upon, but the pur- 
chaiter refuses p.rfcirmance. In such case it 
is perfectly familiar law that tlie ]iiir('haser 
ia legally ilalile to pay the price of the gouils 



' although, in point of fact, he has never had 
them. The order to pay on delivery is 
merely a superadded term of the contract; 
but it is a term to be performed by the pur- 
chaser, and has no other effect upon the con- 
tract than any other term affecting the 
factum of delivery. It must be performed 
by the purchaser, just as the obligation to re- 
ceive the goods at a particular time or a par- 
ticular place. Its non-performance is a breach 
by the purchaser, and not by the seller, and 
therefore cannot affect the right of the seller to 
regard the contract of sale as complete, and 
completely performed on his part, without 
any regard to the question whether the title to 
the goods has passed to the purchaser as upon 
an actual reception of the goods by him. If 
this be so, the case of the commonwealth falls 
to the ground, even upon the most critical 
consideration of the contract lietwecn the par- 
ties, regarded as a contract for civil piirfioses 
only. The duties which lie intermediate be- 
tween those of the seller and those of the 
purchaser are those only which pertain to, 
and are to be performed by, the carrier. 
These, as we have before seen, are the ordi- 
nary duties of carriage and delivery, with 
the additional duty of receiving the price 
from the purchaser, and transmitting it to 
the seller. The only decided case to which 
we have been referred which presents the ef- 
fect of an order C. O. D. to a carrier is Ilig- 
gins v. Murray, 73 N. Y. 252. There the 
defendant eiiqiloyed the plaintiff to manu- 
facture for liiiii a set of circus tents. When 
they were finished, the plainlilf shipped them 
to the defendant C. O. I)., and they were de- 
stroyed by lire on the route. It was held that 
the defendant, who was the ]iurcliaser, should 
bear the loss; that the plaintilf had a lien on 
the tents for the value of his labor and ma- 
terials, and his retaining his lien liy shipping 
them C. O. D. was not inconsistent with, aiul 
did not affect, his right to enforce the de- 
fendant's liability. In the course of tlio 
Opinion, Chief .Iiistico I'lii'itcH said: "Siip- 
Iiose, in this case, that the defendant had re- 
lused to accejit a delivery of the tent, his lia- 
bility would have been the same, although 
the title w;is not in him. The plaintiff had 
a lien ujiou the iirticle for the value of his 
lalior and materials, which was good as long 
as he retained possession. * • * Hetain- 
ing the lien wjis not inconsistent with his 
right to enforce the liability for which this 
aclion was brought. That liability was com- 
pl le when the request to ship was made by 
the defendant, and was not alTecled by com- 
plying with the rei|uest, nor by retaining the 
lien the same as when the request was uiado. 
As the article was shipped at the request of, 
and for the benellt of, the defendant, (assum- 
ing that it was done in aci'ordance with the 
directions,) it follows that it was at his risk, 
and could not iiiqiair the right of the jilaiu- 
tiff to recover for the amoiiiit due him upon 
the ]ierformance of his contract. * • * 
As before slated, the point as to who had the 
Ullo is not decisive. It may be Hdmitlod 



EFFKCT OF THE CONTEACT— SALE OF SPECIFIC CHATTEL. 



115 



that the plaintiff retained tlie title as secu- 
rity for the debt, and yet the defendant was 
liable for the debt in a proper personal ac- 
tion." It seems to us tliis reasoning is pei- 
fectly sound. Practically, it was ruled that 
the effect of the order C. O. D. was simply 
the retention of tlie seller's lien, and tliat 
such retention of lien is not inconsistent 
with a rislit of recovery for the price of tha 
ailicle, thoucrh, in point of fact, it is not de- 
livered to the purchaser. In other words, 
tlie literal state of the title is not decisive of 
the question of liability of the purchaser, and 
he may be coiuj)elled to pay fur the article, 
though he never received it into his actual 
possession. The chief justice propounds the 
very question suggested, heretofore, of a re- 
fusal by the pun-liaser to accept the article, 
and holds that his liability would be the 
same, though the title was not in him. 

In Hutchinson on Carriers, at section 389, 
the writer thus states the position and duty 
of the carrier: "The carrier who accepts the 
goods with such instructions [C. O. D.] un- 
dertakes that they shall not be delivered un- 
less the condition of payment be complied 
with, and becomes the agent of tlie shipper 
of the goods to receive such payment. He 
therefore undertakes, in addition to his duties 
as carrier, to collect for the consignor the 
price of his goods." And again, in section 
o90: "When the goods are so received, the 
carrier is held to a strict compliance witli 
such instructions; and, if the goods are de- 
livered without an exaction from the con- 
si;^uee of the amount wliicli the carrier is in- 
structed to collect, he becomes liable to the 
consignor for it." This is certainly a correct 
statement of the position and liability of the 
carrier. He becomes subject to an added 
duty, — that of collection; and, if he fails to 
perform it, he is liable to the seller for the 
[irice of the goods. We have searched in 
vain for any text-writer's statement, or any 
decision, to the effect that in such case no 
titli; passes to the purchaser. We feel well 
assured none such can be found. But, if 
this 1)6 so, the whole theory that the title 
does not pass if the money is not paid falls, 
and the true legal status of the parties re- 
sults that the seller has a remedy for the 
price of his goods against the earlier. In 
other words, an order from a seller to a car- 
rier to collect on delivery, accepted by the 
carrier, creates a contract between the seller 
and the carrier, for a breach of which by the 
carrier the seller may recover the price from 
him. So far as the seller and purchaser are 
concerned, the latter is liable, whether he 
takes the goods from the carrier or not, and 
the order itself is a mere provision for the 
retention of the seller's lien. While, if the 
goods are not delivered to the purchaser by 
the carrier, the title does not pass, that cir- 
cumstance does not alfect the character of the 
transaction as a sale; and the right of the 
seller to recover the price from the purchaser, 
if he refuse to take them, is as complete as 
if lie had taken them, and not paid for them. 



j Thus far we have regarded the transactions 
between the parties in its aspect as a civil 
i contract only; but, when viewed in its as- 
' pect as the source of a criminal prosecution, 
the transaction becomes much more clear of 
j doubt. It is manifest that, when the pur- 
I chaser ordered the goods to be sent to him 
! C. O. D., he constitute 1 the carrier his agent, 
both to receive the goods from the seller, and 
to transmit the price to the seller. When, 
thrrefore, the goods were delivered to the 
carrier at Pittsburgh for the purpose of trans- 
povlation, the duty of the seller was per- 
formed, as we liave already seen, so far as 
he and the purchaser were concerned, and as 
between them the transaction was com;)Iete. 
The duty of transportation devolved upon 
the carrier, and for tliis lie was, in one sense, 
the agent of the seller, as well as of the pur- 
chaser; but, as it was to be at the expense 
of the purchaser, the delivery to the carrier 
was a delivery to the purchaser; and this 
was ruled in Garbracht's Case. The injunc- 
tion to the carrier to collect the money on de- 
livery imposed an additional duty on the car- 
rier, which the carrier was, of course, bound 
to discliarge. This arrangement was a mat- 
ter of convenience, both to the purchaser and 
the seller, relative to the payment and trans- 
mission of the price; but that is all. To con- 
vert this entirely innocent and purely civil 
convention, respecting tlie mode of collect- 
ing the price of the goods, into a crime, is, 
in our judgment, a grave perversion of the 
criminal law, to which we cannot assent. As 
a matter of course, there is an utter absence 
of any criminal intent in the case. The de- 
fendant had a license. The sale was made 
at his place of business, and both the sale 
and delivery were completed within the ter- 
ritory covered by the license. If, now, a 
criminal character is to be given to the trans- 
action, it must be done by means of a tech- 
nical inference that the title did not pass un- 
til the money was paid; and thus that the 
place of sale, which in point of fact was in 
Allegheny county, was changed to Mercer 
county, where no sale was made. Even 
granting that, in order to conserve the ven- 
dor's lien, such a technical inference would 
be justified for the purposes of a civil con- 
tract, it by no means follows that the plain 
facts of the case must be clothed with a crim- 
inal consequence on that account. So far as 
the criminal law is concerned, it is only an 
actual sale without license that is prohibit- 
ed. But there was no such sale, because all 
the essential facts which constituted the sale 
transpired in Allegheny county, where the 
defendant's license was operative. The car- 
rier, being the agent of the purchaser to re- 
ceive the goods, does receive them from the 
seller in Allegheny county, and the delivery 
to him for the purpose of transportation was 
a delivery to the purchaser. This is the le- 
gal, and certainlv the common, understand- 
ing of a sale. The statute, being criminal, 
must be strictly construed; and only those 
acts which are plainly within its meaning, 



116 



SALES. 



according to the common understanding of 
men, can be regarded as prohibited criminal 
acts. We cannot consider, therefore, tliat a 
mere undertaking on the part of the carrier 
to collect the price of the goods at the time 
of his delivery to the puroliaser, tliough the 
payment of the price be a condition of the 
delivery, can siiihce to convert the seller's 
delivery to the carrier for transportation and 
collection into a crime. We therefore hold 
that the sales made bj the defendant upon 



orders, C. O. D., received from the purchasers 
were not in violation of the criminal statute 
against sales without license, and the con- 
viction and sentence in the court below must 
be set aside. The judgment of the court of 
quarter sessions is reversed, and the defend- 
ant is discharged from bis recognizance up- 
on this indictment. 

Williams, J., delivered a dissenting opin- 
ion. 



: k 



EFFECT OF THE CONTKACT— SALE OF SPECIFIC CHATTEL. 



117 



GIBBS V. BENJAMIN. 

(45 Vt. 124.) 

Supreme Court of Vermont. Montpelier. Nov., 
1872. 

*Book account. The facts reported by *125 
the auditor sufficiently appear in the opin- 
ion of the court. The court at the March term, 
1871, Rutland county, WirF.iiLER. J., presiding, 
rendered judgment on the rejiort for the plain 
tiff for the price of the wood sued for. Excep- 
tions by the defendant. 

R. C. Abell, for plaintifif. Joseph Potter 
and Edgerton & Nicholson, for defendant. 

REDFIELD, J This action is book account 
to recover the price of cord wood alleged by 
the plaintiff to have been sold the defendant in 
April, 1869. Most of the wood was piled on 
the margin of Lake Champlain. on plaintiff's 
farm, in Benson, in this state. Two small par- 
cels of the wood were on the opposite shore of 
the lake. About a week after the negotiation 
(which plaintiff claims was a sale), the wood 
was carried away by the flood of the lake, and 
lost. The report of the auditor gives a minute 
detail of every incident of the negotiation, and 
submits them to the court to interpret their le- 
gal effect. 
*137 *The parties met at the instance of the 
plaintiff, and inspected the wood; after 
some discussion, it was agreed that the defend- 
ant should purchase the wood at $8.50 per cord, 
the defendant insisting that a portion of it was 
less than four feet in length, and that some 
abatement should be madefor such deficiency; 
to which the plaintiff did riot assent. It was a 
part of the agreement, that the parties should 
meet and measure the wood, and accordingly, 
on the ISlth day of April, 18G9, they proceeded to 
measure the several piles of wood, each taking 
memoranda of the measurement as it pro- 
ceeded. The defendant measured the length 
and still claimed some abatement therefor. 
The plaintiff insisted that by the terms of the 
agreement, the wood was to be assumed to be 
four feet in length. "As it was getting dark 
when the measurement was completed, the 
parties went home, each with the figures for 
having a computation of the quantity of wood 
made therefrom"; and both parties expressed 
their inability to make the computation at the 
time. On the 21st of April, the defendant, with 
his son, went to the plaintiff's house, to see if 
they could agree about the quantity of wood 
that had been measured. The plaintiff had 
computed the quantity of wood at 3f)4 cords and 
some feet; "but, by mistake, had omitted one 
pile, containing some GO cords." The defend- 
ant informed the plaintiff that he made the 
quantity 24G cords, after abating five inches 
for deficiency in the length of some portion of 
it, and proposed to the plaintiff that he would 
take the wood at 246 cords, as he made it, or at 
204 cords, as computed by the plaintiff'. The 
plaintiff replied tliat he might have it at 204 
cords, and the defendant agreed to take it. 
After the defendant left, the plaintiff discov- 
ered the mistake, and immediatel\' notified the 
defendant that he could not have the wood at 
21)4 cords. The defendant sent back word that 
he would again meet the plaintiff, and did so in 
the afternoon of the same day. Plaintiff de- 
clined to let defendant have the wood at 204 
cords, but consented to throw off 5 inches in 
length from two piles. Defendant refused to 
take the wood, except at 304 cords. The audi- 
tor has stated many other incidents; but this is a 
substantial statement of the facts, as detailed 



by the auditor. It is not claimed that the 
two piles of wood across the lake were de- 
*livered to the defendant, either actually *128 
or constructively; so the controversy is 
contined to the wood situate on the plaintiff's 
farm in Benson. 

I, The defendant agreed to purchase all the 
wood piled on the plaintiff's farm on the mar- 
gin of the lake, at .$3.00 per cord; and if this 
comprised the whole case, it would be, in the 
language of Lord Brougham in the case of Lo- 
gan V. Le Mesurier, 6 J\loore P. C, 116 "Selling 
an ascertained chattel for an ascertainable 
sum"; and by the rule of law applied to the sale 
of ponderous and bulky articles, such as wood, 
logs, coal and the like, would effectually pass 
the property to the vendee. Ilutf^hins v. Gil- 
christ. 23 Vt. 88; Sanborn v. Kittrcdgo, 20 lb. 
m<J; Birge et al, v. Kdgertou, 38 Vt. 291. But 
this case has other elements which impress up- 
on it quite a different character. It was part of 
the contract that the parties should measure the 
wood and ascertain the quantity. They met 
for that purpose, and disagreed; and that disa- 
greement was as to the substiTnce of the con- 
tract. The plaintiff insisted that it was agreed 
and part of the contract, that defendant should 
take the wood at "running measure"; the de- 
fendant claimed that he purchased solid cords; 
and that issue grew into controversy, but was 
never settled. The report does not state when 
the price was to be paid; but in the absence of 
any special agreement, it is to be assumed that 
it was to be paid on delivery. 

The principle is well settled, and uniform in 
all the cases, that when any thing remains to 
be done by either, or both, parties, precedent 
to the delivery, the title does not pass. And so 
inflexible is the rule that, when the property 
has been delivered, if any thing remains to be 
done by the terms of the contract, before the 
sale is complete, the property still remains in 
the vendor. Parker v. Mitchell, 5 N. H. 165; 
Ward v. Shaw, 7 'Wend. 404. The contract 
must be executed, to effect a completed sale, 
"and nothing further to be done to ascertain 
the quantity, quality, or value, of the property. " 
Bknkett. .1., in Hutchins v. Gilchrist, sujira. 
"The general rule in relation to the sale of 
personal property, is, that if any thing remains 
to be done by the seller before delivery, no 
property passes to the vendee, even as between 
the parlies." Pol.\nd, J., in Hale v. 
Huntlev et al. 21 Vt. 147: Chit. *Con. 396. *129 
This rule of law applied to the facts as re- 
ported in this cu.se, retains the property in the 
wood in the plaintiff, and leaves the contract 
executory, and, as a sale, incomplete. The case 
of Simmons v. Swift, 5 B. & C. 8.57, is much like 
this, but much stronger in its facts. It was an 
action for the price of a stack of bark sold at 
£9 OS. per ton. After the sale, it was agreed 
between the parties that the bark should be 
weighed by two persons, each party to name 
one. Part of the bark was weighed and de- 
livered, the residue was much injured by a 
flood, before it was delivered, and for that rea- 
son, the buyer refused to take it. The court held 
that the bark was to be weighed before deliv- 
ery, to ascertain the price; and as that act had 
not been done, the property remained in the 
seller, and that he must bear the loss. This 
was not a case where a portion was sold to be 
measured or weighed from the bulk, which 
would have no identity until severed and set 
apart; but the whole stack was sold, and a por- 
tion weighed and delivered. The subject^ of 
the sale was "ascertained" and the price "as- 
certainable;" yet the weighing was a thing to 
be done before the property passed to the 
purchaser. 



113 



SALES. 



In case of the insolvency of the defendant. 
it could hardly be claimed that the wood be- 
came part of his assets. Or if attached by his 
creditor, such creditor could hardly show a 
color of right, as against the plaintitf. 

The plaintiff's counsel seem much to rely on 
the case of Gilmour v. Supple. 11 Moore P. C, 
531. reported in 7 Am. Law Reg. (old series). 
240. in that case, the plaintilT sold a raft of 
lumber for a fixed price per foot, with specifica- 
tion of the measurement of each log. made by 
a public officer appointed for that purpose un- 
der the law of Canada, amounting in the aggre- 
gate to 71,443 feet, '"to be delivered at Indian 
Cove booms. " The seller conveyed the raft to 
the place of delivery, made it fast to the booms. 
and notitied the servant of the purchaser of the 
delivery, who took possession of the same. 
The judge charged the jury, that "if there was 
an actual delivery at the place, into the posses- 
sion of defendant's servants, the plaintiff was 
entitled to recover." The jury found for the 
plaintiff. Mr. .Justice Crf.ssweix, in delivering 
the judgment, reviews, approvingly, the 
*130 English^ cases of *Uanson v. Mever, 6 
Kast. 014. Rugg v. Jlinelt. 11 lb. 210. and 
'Wallace v. Breeds, 13 lb. 522. and Simmons v. 
Swift, ut supra, and says: "If it appears that 
the seller is to do something to the goods sold 
on his own behalf, or if an act remains to be 
done by, or on behalf of, both parlies, before 
the goods are delivered, the property is not 
chatiged." The learned judge then proccedslo 
show that the rule of law, well established by 
these cases, had no application to that case, and 
in conclusion says: "There was. therefore, noth- 
ing to be done by the seller on his own behalf; 
he had ascertained the whole price of the raft 
by the measurement previously made; he had 
conveyed the raft to Indian Cove, and, accord- 
ing to the finding of the jury, had delivered it 
there. Nor was there anythinir further to be 
done, in which both were to concur, as in Sim- 
mons V.Swift." The jilalntiir recovered bo- 
cause the sale was completed by delivery, and 
nothing further remained to be done. 

II. We think this case within the statute of 
frauds. Our statute is a substantial re-enact- 
ment of the 29 Charles II., and has received the 



same construction given to the English statute. 
Spencer v. Hale, 30"Vt. 314, was a book action 
for the price of a quantity of fence posts, in- 
spected and purchased by defendant, to be de- 
livered on the cars at Shaftsbury. The plaintifl; 
delivered the posts on the cars furnished by de- 
fendant, at Shaftsbury. and they were conveyed 
to the defendant's residence in New York. 
The defendant claimed that he never "accept- 
ed" them. The case turned upon the effect of 
the statute of frauds. Chief Justice Redkielu 
delivered the opinion of the court, holding that 
the reception of the posts ou board the cars 
furnished by the purchaser, and the forwarding 
of them by the station man. who. for that pur- 
pose, was his agent, was an acceptance; and 
in defining the rule for compliance with the 
statute of frauds, saj's: "It is undoubtedly true 
that the defendant, at the time and place, had 
a right to repudiate the posts after delivery. 
In other words, in order to perfect the case un- 
der the statute of frauds, something more is 
necessary than a mere delivery of the goods. 
In the language of the statute, the purchaser 
must 'accept and receive part of the goods." 
Authorities might readily be multiplied, 
affirming the '*rule in substantially the *131 
same language; but we recur to it as of ac- 
knowledired authority in our own courts. If 
we coulii hold in this case — considering the nat- 
ure of the propertj' sold — that there was a con- 
structive delivery; yet. under the statute of 
frauds, "the purchaser had the right, at the 
time and place, to repudiate the wood after de 
livery. " And the auditor finds, distinctly, that 
the defendant, while the measurement was be- 
ing done (an act provided for by the contract 
of sale), refused to take the wood upon the 
terms and conditions prescribed by the plain- 
tiff; and the plaintiff, as distinctly, refused to 
let him have the wood upon the terms exacted 
by the defendant. It is not important whicli 
party was in the wrong. It is enough that the 
purchaser refused to "accept" the wood, to 
render the sale invalid under the statute of 
frauds. 

The judgment, therefore, of the county court 
is reversed and judgment on the report for the 
defendant to recover his costs. 



EFFECT OF THE CONTRACT— SALE OF SPECIFIC CHATTEL. 



110 



MELDUUII ut al. v. SNOW. 

(9 Pick. 441.) 

Supreme .Tudicial Court of Massachusetts. Suf- 
folk and Nantucket. March Term, 18.30. 

Replevin brought by the plaintiffs, who are 
brewers in the city of Boston, to recover of 
the defendant, a deputy of the sheriff of Suf- 
folk, eighteen beer barrels, e.icU containing 
about thirty gallons of beer, with their con- 
tents, being in the collar recently occupied by 
one Klein, in Market street; which the plain- 
tiffs aver to be their property, and that the 
defendant took and unlawfully detained the 
same on the 1st day of August, 1S2S. 

The defendant pleaded as to the beer, that 
it was the property of Klein, and that he, the 
defendant, had attached it as such at the 
suit of Klein's creditors; to which the plain- 
tiffs replied property in themselves, travers- 
ing Klein's ownership, and issue was joined 
thereon. 

At the trial before Wilde, J., the plaintiffs 
proved that the beer was .sent to Klein in 
the spring, he being a retailer of beer, and 
carrj'ing on his business in the cellar where 
the beer was when it was attached by the de- 
fendant. 

The plaintiffs also proved, that according 
to the universal usage of trade here, and in 
other places in this country, the following 
are the terms upon which retailers are sup- 
plied by the brewers. In the spring, the 
brewer sends to the retailer such quantity as 
the retailer expects to vend, and at a stipu- 
lated price, and in barrels belonging to the 
brewer, which are returned to him when 
emptied. The retailer pays for all that he 
vends in the course of the season, at the price 
at which it was originally furnished. If the 
beer becomes sour or stale, or is lost by the 
bursting of the casks, or by fire or other 
casualty, the loss falls on the brewer. If any 
beer remains unsold at the end of the season, 
the retailer has a right to return it to the 
brewer, but the brewer has no right to take 
It without his consent Payment is never 
made by the retailer in advance, but usually 
in annual or semiannual settlements, when 
what has been sold is paid for and the resi- 
due is returned or remains a subject for fu- 
ture adjustment The profits of retailing be- 
long exclusively to the retailer, and all losses 
by bad debts fall upon him. The brewer's 
price of beer never varies. Beer cannot be 
drawn off nor removed in warm weather 
without injury and great danger of destroy- 
ing it. 

Sowden, a brewer in Boston, who has car- 
ried on the business for twenty-two years, 
testified, that he never considered the sale 
absolute till the barrel was emptied. 

It was testified that the custom was ob- 
served by the plaintiffs in their dealings, and 
that Klein was one of their customers. 

The plaintiffs also produced an instrument 
made and delivered to them by Klein on the 
first day of August, previously to the service 



of the writ, as follows:— "Whereas I haveal- 
Avays holdcn tlie beer, now in the cellar re- 
cently occupied by me, in the casks furnish- 
ed by Meldrum & Co., as being of their prop- 
erty unless paid for, and the same being 
now atlacliod by ray creditors, ought of right 
according to our contract, to be delivered up 
to them; therefore and for good and valua1)Ie 
considerations me thereto moving, I do here- 
by assign and tiansfer ail my right, title and 
property therein, unto the said Meldrum & 
Co., they crediting me in account for what 
they thus receive." 

Horton, the attesting witness to the as- 
signment, testified that he went with the 
plaintiffs' clerk to the defendant, and that 
the clerk produced this instrument and de- 
manded tlie beer and barrels, but the defend- 
ant refused to give them up. 

As to the question, whether the i>roperty 
in the beer was in Klein, the jury were in- 
structed, that if they believed that he took 
the beer of the plaintiffs on the terms of the 
custom above stated, the property became 
vested in him; that this was in fact a con- 
ditional sale, and the beer could be attached 
as belonging to him, and the only remedy of 
the plaintiffs would be to recover of him the 
price. 

The jury found a verdict for the defendant. 

The plaintiffs moved for a new trial, be- 
cause the judge instructed the jury, that the 
delivery of the beer, upon the terms of the 
custom proved, constituted a conditional sale 
to Klein, and vested in him the property in 
the beer, subject to attachment for his debts; 
whereas the plaintiffs contended, that such 
delivery vested only a special property in 
Klein for certain purposes; and tliat the gen- 
eral property remained in the plaintiffs; so 
that the beer could not be attached as the 
propeity of Klein; and that by virtue of the 
assignment to them of his special property, 
they became entitled to the immediate pos- 
session, and acquired the whole title, so that 
the detention by the defendant after demand 
made, was unlawful. 

C. G. Loring and E. G. Loring, for plains 
tiffs. S. D. Ward, for defendant 

PER CURIAM. The principal question in 
the case regards the ownership of the beer. 
Evidence was given at the trial, of a cus- 
tom among brewers to supply retailers with 
beer in the manner stated in the report of the 
judge. It is argued that this mode of deal- 
ing is necessary, and it should seem to be 
so; for in general the retailer would not be 
able to purchase a large quantity of beer at 
once, and it appears that beer must be sup- 
plied to him in cold weather, as it cannot be 
removed in warm weather without injury. 
The question is, whether the beer is liable to 
attachment as the property of the retailer. 
The contract is very similar to that of sale 
or return in England; and in the case of some 
kinds of manufactures such a contract is re- 
quired, owing to particular circumstances 



120 



SALES. 



which take them out of the rules of ordinaiy 
sales. It is on this cround that contracts of 
sale or return are held valid; and it is uni- 
formly considered that in such contracts the 
property continues in the original owner; ex- 
cept in cases under the statute of James, of 
banliruptey, which is not in force in this com- 
monwealth. 

It is objected, that in the contract of sale 
or return, the article is to be returned, unless 
sold, but that by the custom under considera- 
tion, it may or may not be returned, at the 
election of the retailer. We are not clear 
that there is any such distinction; nor is 
there good reason for it. It is consistent 
with the English law, that the beer shall re- 
main the property of the brewer until the 
election of the retailer sliall be made. 

We place this contract on the same ground 
as that of sale or return in England, and we 
are glad to find authorities which sustain us; 
but without authorities we should deem it 
proper to uphold such a contract. Retailers 
who take beer to sell are often persons of 
very small property, and the custom appears 



to be so general and well known, that the re- 
tailer would not be supposed to be the own- 
er of the beer; no injury therefore can arise 
to creditors of the retailei'. And it being 
beneficial to the community to introduce the 
use of beer, public policy would justify us 
in favouring the custom. 

It is asked, how shall the beer be attached; 
whether as the property of the brewer, or of 
the retailer. It is not necessary for us to an- 
swer this question. There are many cases 
where cliattels cannot be attached as the 
property either of the general or of the spe- 
cial owner. 

An objection is raised in regard to the pos- 
session of the plaintiffs in replevin, the pos- 
session and the right of possession being here 
in the retailer. It is sufficient to remark, 
that when the sale of beer is stopped by the 
acts of the retailer, his right to retain ceases; 
and further, in the case before us, the gen- 
eral property being in the brewer, and the 
retailer having assigned all his right in the 
beer to him, the action may well lie. 

New trial granted. 



EFFECT OF THE CONTRACT— SALE OF CHATTEL NOT SPECIFIC. 121 



GUSHING et al. v. BREED et al. 

(14 Allen, 376.) 

Snpreme Judicial CJourt of Massachusetts. 
Jan. Term, 1867. 

Contract to recover the price of 500 bush- 
els of oats sold and delivered. The answer 
admitted the sale and delivery of 10.5 bush- 
els, and offered judgment for the price there- 
of, and denied the residue. It appeared 
that the plaintifCs veere owners of a cargo 
of oats, which, on being weighed, was found 
to contain 6,605 bushels, and was stored in 
the Merchants' Grain Elevator in Boston, 
which belonged to persons whose business 
it was to receive, elevate, store, weigh, and 
deliver grain. The plaintiffs thereafter 
agreed to sell to the defendants 500 bushels 
thereof, and delivered to them the following 
order upon the proprietors of the elevator, 
dated June 23, 1864: "Please deliver Breed 
& Co., or order, 500 bushels of black oats 
from cargo, per schooner Seven Brothers, 
storage commencing, to the person or per- 
sons in whose favour this order is drawn, 
June 29, 1864." This order was presented 
on June 25, 1864, and accepted in the usual 
manner. The order was entered in the 
books, and on the same day 105 bushels of 
the oats were delivered to defendants, and 
before July 5, 1864, the whole cargo had 
been sold and delivered and removed from 
the elevator, except 1,274 bushels, which in- 
cluded the 305 bushels agreed to be sold to 
the defendants. On the 5th of July a fire 
occurred, which rendered the oats which re- 
mained in the elevator nearly worthless. It 
was the general usage of dealers in grain in 
Boston to place large quantities of grain In 
elevators, where the same remained until 
sold, by orders given to the purchaser, and 
after such sale it was removed from the 
elevator or kept therein, at the election of 
the purchaser. After the acceptance of such 
order by the proprietors of the elevator, the 
grain covered thereby was treated by them 
as the property of the purchaser; the ven- 
dor had no further control over it, but the 
proprietors held the same subject to the 
order of the purchaser, received orders from 
liim in the same manner as from the original 
vendor, or weighed It out to him as he re- 
quired, they guaranteeing to deliver out the 
full number of bushels weighed into the ele- 
vator, charging him with storage. Differ- 
ent cargoes of the same quality, belonging to 
different owners, were sometimes mingled 
in the bins. Grain so bought was paid for 
without regard to whether or not it had 
been separated and removed from the ele- 
vator, and all damage to grain so sold, from 
internal causes occurring after the delivery 
of the order, was borne by the purchaser. 
All the above usages were known to the de- 
fendants, but they objected to the evidence 
to prove the same. The judge ruled that 
there was no such change of title to the 
grain, except as to the 105 bushels actually 



removed by the defendants from the ele- 
vator, as to make the defendants liable, and 
found that the plaintiffs were only entitled 
to recover the price agreed for the 105 bush- 
els, with interest. The plaintifCs alleged ex- 
ceptions. 

W. Gaston and W. A. Field, for plaintifCs. 
C. B. Goodrich and I. J. Austin, for defend- 
ants. 

CHAPMAN, J. The use of elevators for 
the storage of grain has Introduced some 
new methods of dealing, but the rights of 
parties who adopt these methods must be 
determined by the principles of the common 
law. The proprietors of the elevator are 
the agents of the various parties for whom 
they act. When several parties have stored 
various parcels of grain in the elevator, and 
it is put into one mass, according to a usage 
to which they must be deemed to have as- 
sented, they are tenants in common of the 
grain. Each is entitled to such a proportion 
as the quantity placed there by him bears 
to the whole mass. When one of them sells 
a certain nunilier of bushels, it is a sale of 
property owned by him in common. It is 
not necessary to take it away in order to 
complete the purchase. If the vendor gives 
an order on the agents to deliver it to the 
vendee, and the agents accept the order, and 
agree with the vendee to store the property 
for him, and give him a receipt therefor, 
the delivery is thereby complete, and the 
property belongs to the vendee. The ven- 
dor has nothing more to do to complete the 
sale, nor has he any further dominion over 
the property. The agent holds it as the 
property of the vendee, owned by him in 
common with the other grain in the elevator. 
It is elementary law that a tenant in com- 
mon of personal property in the hands of 
an agent may sell the whole or any part of 
his interest in the property by the method 
above stated, or by any other method equiv- 
alent to it. Actual separation and taking 
away are not necessary to complete the 
sale. As to the property sold, the agent 
acts for a new principal, and holds his prop- 
erty for him. The law is the same, whetlier 
the proprietors are numerous or the vendor 
and vendee are owners of the whole. If 
the vendee resells the whole or a part of 
what he has purchased, his vendee may, by 
the same course of dealing, become also a 
tenant in common as to the part which he 
has bought. 

This is not like the class of sales where 
the vendor retains the possession, because 
there is something further for him to do, 
such as measuring, or weighing, or mark- 
ing, as in Scudder v. Worcester, 11 Gush. 
573; nor like the case of Weld v. Cutler, 2 
Gray, 195, where the whole of a pile of coal 
was delivered to the vendee in order that he 
might make the separation. But the prop- 
erty is in the hands of an agent; and tlie 
same person who was the agent of the ven- 



122 



SALES. 



dor to keep, becomes the agent of the ven- 
dee to keep; and the possession of the 
agent becomes the possession of the princi- 
pal. Hatch V. Bayley, 12 Cush. 27, and 
cases cited. The tenancy in common results 
from the method of storage which has been 
agreed upon, and supersedes the necessity 
of measuring, weighing, or separating the 
part sold. 



No delivery Is necessary to a tenant In 
common. Beaumont v. Crane, 14 Mass. 400. 

Upon these principles, the plaintiffs are 
entitled to recover the amount due them for 
the property thus sold and delivered to the 
defendants. The damage occasioned to this 
property by the fire must be borne by the 
defendants, as owners of the property. 

Exceptions sustained. 



EFFECT OF THE CONTRACT— SALE OF CHATTEL NOT SPECIFIC. 12^ 



RHODE et al. v. THWAITES. 
(6 liarn. & O. 388.) 
Court of King's Bench. Hilary Term, 1827. 
Declaration stated, tliat on the 3d Decem- 
ber, 1S25, the defendant bargained for and 
bought of the plaintiffs, and the plaintiffs, at 
the request of the defendant, sold to him cer- 
tain goods, to wit, twenty hogsheads of 
sugar, at 5(!s. 6d. per cwt., to be delivered 
by the plaintiffs to the defendant upon re- 
(iuest, and to be paid for at the expiration of 
two months then following; and in consid- 
eration thereof, and that the plaintiffs, at 
the lilie request of the defendant, had under- 
taken and faithfully promised the defendant 
to deliver the goods to him, he, the defendant 
undertook and faithfully promised the plain- 
tiffs to accept the goods when he should be 
requested, and to pay them, the plaintiffs, 
for the same, at the expiration of the said 
credit. Averment, that the price of the goods 
amounted to a certain sum, to wit, &c., and 
that although the plaintiff's had always been 
ready and willing to deliver the goods to the 
defendant, and requested him to accept the 
same, and although the credit had expired, 
yet the defendant did not, nor would, at the 
time when he was so requested, or any time 
before or afterwards, accept the goods or 
pay the plaintiffs, or either of them, for the 
same, but refused so to do. There was theu 
an indebitatus count for goods bargained and 
sold. The defendant suffered judgment to go 
by default. Upon the execution of the writ 
of inquiry the plaintiff's proved that a con- 
tract for the sale of twenty hogsheads of 
sugar was made on the 3d of December, 182.5, 
at 56s. Gd. per cwt, but there was no suffi- 
cient note in writing to satisfy the statute 
of frauds. On that day the plaintiff had in 
his warehouse on the floor, in bulk, a much 
larger quantity of sugar than would be re- 
quired to fill up twenty hogsheads, but no 
part of it was in hogsheads. The defendant 
saw the sugar in this state in the plaintiffs' 
warehouse, and then made the contract in 
question. Four hogsheads were filled up and 
delivered to the defendant on the 10th of De- 
cember, and a few days afterwards the plain- 
tiffs filled up the remaining sixteen hogs- 
heads, and gave notice to the defendant that 
they were ready, and required him to take 
them away; he said he would take them as 
soon as he could. They were not weighed 
till Februaiy, 1826, when the plaintiffs de- 
livered a bill of parcels to the defendant. 
The plaintiffs added to the bulk, from time 
to time, as sales were made, and it did not 
very distinctly appear whether the sixteen 
hogsheads were filled wholly with the same 
sugar which was in the warehouse on the 
3d of Decejiber when the contract was made. 
The four hogsheads which were first deliver- 
ed were filled with that sugar. It was ad- 
mitted that there was sufficient evidence of 
a sale of the four hogsheads, inasmuch as 
there was an acceptance of them by the de- 



fendant. No contract in writing sufficient to 
satisfy the statute of frauds having been 
proved, it was insisted that there was no 
evidence of any contract of sale of the six- 
teen hogsheads of sugar, and that the plaiu- 
tiffs could only recover for the four hogsheads 
which had been actually delivered; but the 
jury, under the direction of the under sheriff, 
found a verdict for the value of the twenty 
hogsheads. A rule nisi for setting aside the 
writ of inquiry having been obtained by 
Hutchinson in Trinity term, 

F. Pollock now showed cause. Mr. Hutch- 
inson, contra. 

BAYLEY, J. 'Where a man sells part of a 
large parcel of goods, and it is at his option 
to select part for the vendee, he cannot main- 
tain any action for goods bargained and sold, 
until he has made that selection; but as soon 
as he appropriates part for the benefit of the 
vendee, the property in the article sold passes 
to the vendee, although the vendor is not 
bound to part with the possession until he is 
paid the price. Here there was a bargain, 
by which the defendant undertook to take 
twenty hogsheads of sugar, to be prepared 
or filled up by the plaintiffs. Pour were de- 
livered; as to them there is no question, but 
as to the sixteen it is said, that as there 
was no note or memorandum of a contract in 
writing sufficient to satisfy the statute of 
frauds, there was no valid sale of them; 
and that the plaintiffs in their declaration 
having stated their claim to arise, by vir- 
tue of a bargain and sale, cannot recover for 
more than the four hogsheads which were 
actually dehvered to and accepted by the 
defendant; that in order to recover for the 
others they ought to have declared specially, 
that, in consideration that the plaintiffs would 
sell, the defendant promised to accept them. 
In answer to this, it is said, that there was 
an entire contract for twenty hogsheads, and 
that the defendant, by receiving four, had ac- 
cepted part of the goods sold within the 
meaning of the seventeenth section of the 
statute of frauds. In fact, the plaintiffs did 
appropriate, for the benefit of the defend- 
ant, sixteen hogsheads of sugar, and they 
communicated to the defendant that they had 
so appropriated them, and desired him to 
take them away; and the latter adopted that 
act of the plaintiffs, and said he would send 
for them as soon as he could. I am of opin- 
ion, that by reason of that appropriation 
made by the plaintiffs, and assented to by 
the defendant, the property in the sixteen 
hogsheads of sugar passed to the vendee. 
That being so, the plaintiffs are entitled to 
recover the full value of the twenty hogs- 
heads of sugar, under the count for goods 
bargained and sold. The rule for setting 
aside this writ of inquiry must therefore be 
discharged. 

HOLROYD, J. The sugars agreed to be 
sold being part of a larger parcel, the vendors 



124 



SALES. 



were to select twenty hogsheads for the ven- 
dee. That selection was made by the plain- 
tiffs, and they notified it to the defeudaut. 
and the latter then promised to take them 
away. That is equivalent to an actual ac- 
ceptance of the sixteen hogshe.ids by the de- 
fendant That acceptance made the goods 
his own, subject' to the vendors' lien as to the 
price. If the sugars had afterwards been 
destroyed by fire, the loss must have fallen 
on the defendant. I am of opinion that the 
selection of tlie sixteen hogsheads by the 



plaintiffs, and the adoption of that act by 
the defendant, converted that which before 
was a mere agreement to sell into an actual 
sale, and that the propeity in the sugars 
thereby passed to the defendant; and. con- 
sequently, that plaintiffs were entitled to re- 
cover to the value of the whole under the count 
for goods bargained and sold. 

LITTLEDAl/E, J., concurred. 

Rule discharged. 



EFFECT OF THE CONTRACT— SALE OF CHATTEL NOT SPECIFIC. 125 



FIRST NAT. BANK OP CAIRO v. 
CROCKER et al. 

(Ill Mass. 163.) 

Supreme Judicial Court of Massachusetts. Suf- 
folk. Nov., 1872. 

Tort against Crocker, Smitl] & Co. for the 
conversion of 100 barrels of flour. It appear- 
ed on the trial that Ayers & Co., of Cairo, Il- 
linois, had dealt with defendant corumission 
mercliants in Boston for some years, shipping 
them flour on consignment, for sale in Bos- 
ton, and having an open general consignment 
account with them. Ayers & Co., on August 
23, 1870, consigned to them some flour, and 
drew on them for more than its value, writing 
them that they would make it all right in the 
next shipment. The defendants paid the draft, 
which left Ayers & Co. indebted to defendants 
for about $1,500. On August 24, 1870, Ayers 
& Co. shipped the 100 barrels of flour in dis- 
pute to Boston, taking a bUl of lading "con- 
signed to shipper's order Boston, Mass.," but 
on which was written "St. Ijouis Mills and 
Blackburn. For Crocker, Smith & Co., Bos- 
ton, Mass." They then drew on defendants 
with bill of lading attached, and discounted the 
draft, which defendants refused to accept, and 
it was returned to defendants with the bill of 
lading. When the flour arrived in Boston, 
September 12. 1870, it was accompanied by a 
way bill, on which, under "Consignees," was 
written "Crocker, Smith «& Co., Boston;" and 
the flour was received by them and sold, and 
applied to the account of Ayers & Co. Sep- 
tember 14, 1870, Ayors & Co. drew a draft on 
account of the 100 barrels of flour on Good- 
win, Locke & Co. of Boston, in favor of plain- 
tiffs, and attached to it the bill of lading. The 
draft was accepted and paid when due. The 
bill of lading was Indorsed in blank when de- 
livered by Ayers & Co.. but when forwarded 
by plaintiffs the words "Deliver within-named 
flour to Goodwin, Locke & Company, or order," 
were written over the indorsement of Ayers 
& Co. 

A. Churchill and J. E. Hudson, for plaintiffs. 
A. A. Ranney, for defendants. 

AMES, J. It is manifest that the flour was 
not placed in the hands of these defendants 
for the purpose of securing an existing debt, or 
indemnifying them for any advances that they 
had made. It was not consigned to them in 
order that it might be sold, and the proceeds 
carried to the credit of Ayers & Company in 
general account cuncnt. It is true that the 
consignors knew that they had overdrawn 
their account, and that they had expressly 
promised to "make it all right" at the next 
shipment. But that was an executory con- 
tract. The proposed correction stood wholly in 
agi-eemeut. A general promise to make the 
matter right was not of itself suflicient to 
vest in tlie defendants a title as absolute own- 
ers, even of the goods forwarded at the .next 
shipment, unless the circumstances indicated, 
or at least were consisteut with, such au in- 



tention on the part of the shippers. But in this 
case, the consignment and the draft consti- 
tuted one transaction. The bill of lading and 
the draft came togetlier; and the defendants 
understood that the flour was sent to thorn, 
subject to a claim of $500 in favor of the hold- 
er of the draft. They were to receive it upon 
the trust that they were to pay that amount 
out of the proceeds. The meaning of the trans- 
action on the part of the shippers was that 
the defendants were to receive it for that 
purpose and upon that understanding only. It 
was as if they had said, "You may take this 
flour and sell it on our accotmt, provided you 
will accept this draft" A bill of lading in- 
doreed is only prima facie evidence of owner- 
ship, and is open to explanation. Pratt v. 
Parkman, 21 Pick. 42. This bill of lading was 
provisional, and was not intended to vest the 
property in the defendants, or to authorize 
their taking possession of it, except upon the 
condition of their acceptance of the draft. Al- 
len V. Williams, 12 Pick. 297. 

The act of the defendants, therefore, in tak- 
ing possession of the flour was wholly unau- 
thorized, and gave them neither valid title 
nor lawful possession. AUen v. Williams, ubi 
supra. In proceeding afterwards to sell it as 
if it were their own, and appropriating the 
proceeds, they were guilty of a wrongful con- 
version. A cai'rier may be a mere bailee for 
the consignor; and where by the tei-ms of the 
bill of lading the goods are to be delivered to 
the consignor's order, the carrier is his agent, 
and not the consignee's. Moakes v. Nicolson, 
19 C. B. (N. S.) 290; Baker v. Fuller, 21 Pick. 
318; Mei'chants' Nat. Bank v. Bangs, 102 
Mass. 291. On the refusal of the consignee to 
receive the goods upon the terms and for the 
purposes for which they were sent, he cannot 
take them for any other purpose. Shepherd v. 
Harrison, L. R. 5 H. L. IIG; De Wolf v. G,ard- 
uer, 12 Cush. 19, 23; Allen v. Williams, 12 
Pick. 297. The title to the flour therefore re- 
mained in the shipper, wholly unafl:ected by 
the consignment. Even in the case of a con- 
tract of sale, the fact of making the bill of 
lading deliverable to the order of the vendor, 
when not rebutted by evidence to the con- 
trary, is decisive to show his intention to pre- 
serve the jus disponendi, and to prevent the 
property from passing to the vendee. Wait v. 
Baker, 2 Exch. 1; Van Casteel v. Booker, Id. 
091. The case of a mere consignment to an 
agent would be of course still stronger. 

Upon the refusal of the defendants to accept 
the consignment upon the terms proposed, 
which refusal was sufficiently manifested by 
the protest of the draft and this return of the 
bill of lading, the owners of the flom-, Ayers & 
Company, had a right to seek a new consignee, 
and to make another attempt to obtain an ad- 
vance by a draft to be charged against the 
property. An arrangement was accordingly 
made with the plaintifi's, who discounted their 
draft of .flOO upon the security of the same 
bill of lading that had been sent to the de- 
fendants and returned by them. If this bill 



1:16 



SALES. 



of lading was (Jelivei-ed to the plaiutiffs, in- 
dorsed in blank by Ayere & Company, (and 
there is testimony to that effect.) the transac- 
tion would operate as a ti-ausfer of their title 
in the flour to the plaiutiffs, if such were the 
intention of the parties. As the property was 
at that time in Boston, it was of course in- 
capable of actual delivery at Cairo, and the 
delivery of the evidence of title, with the in- 
dorsement upon the bill of lading, was all that 
could be done for the transfer of the property 
from the general owner to the new purchaser; 
but it would be effectual for that purpose. 
Conard v. Atlantic Ins. Co., 1 Pet 386, 445; 
Gibson v. Stevens, 8 How. oS4; Bryans v. Nix, 
4 M. & W. 775, 791; Low v. De Wolf, 8 Pick. 
101; Gardner v. Howland, 2 Pick. 599; Stan- 
ton v. Small, 3 Sandf. 230; Pratt v. P.arkman, 
24 Pick. 42. In Gibson v. Stevens, the court I 
say, per Taney, C. .!.: "This rule applies to 
every case where tlie thing sold is, from its 
character or situation at the time, incapable of 
actual delivery." To the extent of tlieir ad- 
vance of money upon the draft, therefore, the 
plaintiffs would be considered as purchasers, 
and they would acquire a special property in 
the flour for the purpose of protecting the 
draft. At the time of this transaction, the 
flour remained in the possession of the de- 
fendants, and, with the exception of taking 
possession, nothing had been done on their 
part amounting to a wrongful conversion of it 
to their own use. Tlicy had not put it out of 
their power to replace the shippers in the 
enjoyment of their rights. 

It appears from the report, that, when the 
bill of lading was forwarded the second time, 
the name of the firm of Goodwin. I^icke & 
Comiviny was written over the iudor.'^ement 
of Ayers & Company. But we do not think 
that this fact, whether the blank indorsement 
were filled up after or before the discount 
of the draft, would materially affect tlie plain- 
tiffs' riglits. The bill of lading was altaolied 
to the draft, and the sub.stunce of the trans- 
action was that tlie draft was discounted up<m 
the security of the merchandise Itself. It pur- 
ports to be on aciMunt of the barrels of Hour 
de.scrilied In the bill of lading. The flour, al- 
though Intrusted to Go<idwiu, Locke & Com- 
pany to sell, wa.s appropriated to the speclflc 
purpose of the payment of this draft. The 
bill of lading was put In (ho plaintiffs' hands 
to enable them to hold the meirhandlse as 
their necurlty. and the discounting of the draft 
was the consideration for the transfer of the 
projierty to llieni. It was eonvenlcnl so to 
Indorse the bill of la<1lnK, as to make It man- 
ifest that Goodwin, Locke & Company were 
to receive and dispose of the goods; but they 
were to do so ns trusleps ami ngenis of the 
pInlnllffH, and not as proprietors In their own 
right. They cerlalidy n<c|iilre(l nr) title In the 
pHiperty until they had areepled the draft, 
and when that event happened the giHxIs had 
been dIspoHed of by (he defeiidaids, and had 
gone Into the hands of bona tide holilers with- 
out notice, 80 08 to be beyond recall. The ef- 



fect of this transaction between the plaintiffs 
and Ayers & Company was that the flour was 
designated to stand as collateral security for 
the draft. If the draft had not been accepted, 
the plaintiffs clearly would not have lost their 
title to the flour. It is not necessary to hold 
that the plaintiffs became absolute owners of 
the property; it is enough that they had a 
right of property and possession to secure the 
payment of the draft, and the right of Ayers 
& Company as former owners of the specific 
property had become divested, leaving them 
only a right in the surplus money which might 
remain after a sale of the flour and a payment 
of the draft from the proceeds. De Wolf v. 
Gardner, 12 Cush. 19, has in many respects a 
close analogy with this case. There the gen- 
eral owner of the flour was the plaintiff, and 
the defendant was a party claiming under the 
new consignee, and the court held that the 
plaintiff had parted with the right of property, 
and could not maintain his action. In Bank 
of Rochester v. Jones. 4 N. Y. 407, as in the 
case at bar, the plaint ilTs had discounted a 
draft drawn by the owner of a quantity of 
flour upon the defendant, who, as in the case 
at bar, refused to accept the draft, and claim- 
ed to hold the flour and sold it for the pay- 
ment of a balance due from the drawer. In- 
stead of a bill of lading, there had been a 
carrier's receipt, which the drawer delivered, 
unindorsed, to the plaintiff bank. The agree- 
ment was that the bank sliould hold the flour 
as security that the draft should be accepted, 
but with power to sell it if the draft should 
not be accepted. The court of appeals held 
that the defendant could not acquire any prop- 
erty in the flour, except by performance of the 
condition imposed, namely, the acc(>ptance of 
the draft; that the transaction between the 
consignor and the plaintiff bank gave to the 
latter a general or special property in tlie 
flour; that the transaction constituted a sale 
to the bank In trust for the fullillment of the 
agreement; that the carrier's receipt, though 
not indorsed, was sutlicient evidonco of the 
plaintiffs right of possession; and that the 
statute of frauds was not applicable, as the de- 
livery of the receipt, in consi<leration of the 
discount of the draft, was sutlicient to trans- 
fer tlie title. In legal effwt, and for the pur- 
l>ose of explaining what Is to be done wilh 
the merch.'indlse, there lan be no subslanll.il 
difference between a bill of lading and a 
carrier's receipt. 

We have then In this case an Intent of the 
general owners of the flour to make use of It 
as a s(>curlty for an advaiu'o of money from 
the plalntltTs; a delivery of the bill of lading 
In pursuaiH'o of that Intent; and a valuable 
and executed (Hinslderatlon In the discounting 
of the draft. The fact that the goods wore In 
the custody of the defendants would not pre- 
vent tills .'irrangement from having the cfl'oct 
to transfer the title of Ayers & Comiiany to 
the pljiliitlffs. Wliijiple v. Thayer, 10 Pick. 
25; MeKee v. .liidd. 12 N. Y. 1VJ2. WlielluM- it 
should be regarded as n sale, a pledge or a mort- 



KFFECT OF THE CONTRACT— SALE OF CHATTEL NOT SPECIFIC. 127 



gage, there was a sufEcieut delivery to give 
to the plaintiffs a special property, which they 
could enforce by suit against any wrongdoer. 
They had a right to transfer the propei-ty, sub- 
ject to the same trusts upon which they held 
it themselves, to their correspondent or agent 
in Boston, and it may well be that, if the draft 
had been accepted by Goodwin, Locke & 
Company before the flour had been sold and 
placed out of their reach, they would have 
been the proper parties to have brought this 
action. But the transfer to them for that rea- 
son wholly failed to take eiJect, and they ac- 
quired no title to the flour specifically. If 
they had accepted the draft before the flour 
liad been sold to a bona fide purchaser, the 
case would have been almost exactly like 
Allen V. WiUiams, above cited. That was a 
case in which the consignee of merchandise 
refused to accept the draft which accompanied 
the bill of lading, and took possession of the 



merchandise, claiming as in this ca.se the 
right to do so in order to secure a balance 
due to him from the consignor. The court 
held that a new consignee could maintain 
trover against him. 

Our conclusion then is, that at the time of 
the sale of the flour by the defendants, the 
plaintiffs had a right and property in it, 
which, whether general or special, and whether 
as purchasers, trustees, pledgees or mortgagees, 
gave them a right of possession as again.st 
an wrongdoers; and that the defendants had 
no title whatever and were mere wrongdoers. 
The fact that the draft has been paid by 
the new consignees does not prevent the 
plaintiffs from maintaining the action for the 
benefit and protection of the acceptors of the 
draft, who without fault of their own have 
been deprived of the security upon which it 
was discounted. 

Judgment for the plaintiffs. 



128 



SALES, 



MARVIN SAFE CO. t. NORTON. 

(7 Atl. 418, 48 N. J. Law, 410.) 

Supreme Court of New Jersey. Nov. 29, 1886. 

On certiorari to Mercer common pleas. 

On May 1, 1884, one Samuel N. Schwartz, 
of Hightstown. Mercer county. New Jersey, 
went to Philadelphia, Pennsylvania, and 
there, in the office of the prosecutors, exe- 
cuted the following instrument: "Jlay 1, 
18Si. Marvin Safe Company: Please send, 
as per mark given below, one second-hand 
safe, for which the undersigned agrees to 
pay the sum of eighty-four dollars ($84.) 
seven dollars cash, and balance seven dol- 
lars per month. Terms cash, delivered on 
board at -Philadelphia or New York, unless 
otherwise stated in writing. It is agreed 
that JIarvin Safe Company shall not relin- 
quish its title to said safe, but shall remain 
the sole owners thereof until above sum is 
fully paid in money. In event of failure 
to pay any of said installments or notes, 
when same shall become due, then all of 
said installments or notes remaining unpaid 
shall immediately become due. The Marvin 
Safe Company may, at their option, remove 
said safe without legal process. It is ex- 
pressly understood that there are no con- 
ditions whatever not stated in this memo- 
randum, and the undersigned agrees to ac- 
cept and pay for safe in accordance there- 
with. Samuel N. Schwartz. Mark: Sam- 
uel N. Schwartz, Hightstown, Now Jersey. 
Koute, New Jersey. Not accountable for 
damages after shipment." Schwartz paid 
the first installment of seven dollars, May 
1, 1SS4, and the safe was shipped to him 
the same day. He afterwards paid two in- 
stallments of seven dollars each, by remit- 
tance to Philadelphia by check. Nothing 
more was paid. On July 30, 1SS4, Schwartz 
sold and doliveiod the safe to Norton for 
$or). Norton paid him the purchase money. 
He bought and paid for the safe without 
notice of Schwartz's agreement with the 
prosecutors. Norton took possession of the 
safe, and removed it to his office. Schwartz 
Is Insolvent, and has absconded. The pros- 
ecutor brought trover agahist Norton, and 
In the court below the defendant recovered 
Judgment on the ground that, tlic defendant 
Imviiig bought and paid for tlio sal'c l)ona 
tide, the title to the safe, by the law of Penn- 
Bylvanla, was traiisfcrrod to hini. 

Before Justices IJHI'UE, DIXON, and 
UK ED. 

A. S. Appelget, for plMiiMIlT In riTtlorarl. 
S. M. Schauck, contrn. 

DEPUR, J. The contract exprcsped In the 
writlen order of May 1, IRSI, Kignod by 
Sr'hwnrli!, Is for Ihi- sale of the property to 
him rondltlonnlly; the vendor reserving the 
title, iiotwlthslniidlng delivery, until the con- 
trn<'l price Bhould be jinld. The courlH of 
PennHylvanla ninke a dlntlnctlon between 



the bailment of a chattel, with power in the 
bailee to become the owner on payment of 
the price agreed upon, and the sale of a 
chattel, with a stipulation that the title 
shall not pass to the purchaser until the 
contract price shall be paid. On this dis- 
tinction the courts of that state hold that 
a bailment of chattels, with an option in 
the bailee to become the owner on payment 
of the price agreed upon, is valid, and that 
the right of the bailor to resume posses- 
sion on non-payment of the contract price 
is secure against creditors of the bailee 
and bona fide purchasers from him; but 
that, upon the delivery of personal prop- 
erty to a purchaser under a contract of sale, 
the reservation of title in the vendor until 
the contract price is paid is void as against 
creditors of the purchaser, or a bona fide 
purchaser from him. Clow v. Woods, 5 
Serg. & R. 275; Enlow v. Klein. 79 Pa. St. 
488; Haak v. Linderman, 04 Pa. St. 499; 
Stadtfeld v. Huntsman, 92 Pa. St. 53; 
Brunswick, etc., Co. v. Hoover, 95 Pa. St. 
508; 1 Beuj. Sales (Corbin's Ed.) § 440; 21 
Am. Law Reg. (X. S.) 224, note to Lewis v. 
McCabe. In the most recent case in the 
supreme court of Peunsylvania, Mr. Jus- 
tice Sterrott said: "A present sale and de- 
livery of personal property to the vendee, 
coupled with an agreement that the title 
shall not vest in the latter unless he pays 
the price agreed upon at the time appointed 
therefor, and that, in default of such pay- 
ment, the vendor may recover possession of 
the property, is quite different in its etfect 
from a bailment for use, or, as it is some- 
times called, a lease of the property, coupled 
with an agreement whereby the lessee may 
subsetiuently become owner of the prop- 
erty upon payment of a price agreed upon. 
As between the parties to such contracts, 
both are valid and binding; but, as to 
creditors, the latter Is good, while the for- 
mer Is invalid." Forrest v. Nelson. 19 Re- 
porter, 38, tOS Pa. St. 481. The cases cited 
show that the Pennsylvania courts hold the 
same doctrine with respect to bona tide pur- 
chasers as to creditors. 

In this state, and in nearly all of our sis- 
ter states, conditional sales— that Is, sales of 
personal property on credit, with delivery of 
possession to the pm'chnser, and a stipula- 
tion tliat the title shall remain In the ven- 
dor until the contract price is paid -have 
been held valid, not only against the Imme- 
diate purchaser, Viut also against his cred- 
itors and bona lido purchasers from him, 
unless the vendor has conferred upon his 
vendee Indicia of title beyond mere posses- 
sion, or has forfeited his right In the prop- 
erty by conduct whU-h the law regards as 
frandiiient. The cases are cited In Cole v. 
IliTry, 12 N. J. Law, ."nS; Midland U. Co. 
V. Hitchcock, 37 N. J. Ec]. r)50, !-)59; 1 HenJ. 
Sales (Corbin's Ed.) 85 4:{7-1('.0; 1 Smith, 
L. C. (Hth Ed.) 3:i SK); 21 Am. Law Reg. (N. 
S.) 2"24, note to Lewis v. McCabe; 15 Am. 



CONDITIONS AND WARRANTIES. 



129 



Law Rev. "SO, "Conversion by Purchase." 
The doctrine of the courts of Peunsylvania 
is founded upon the doctrine of Twyne's 
Case, 3 Colie, SO, and Edwards v. Harben, 
2 Term R. 5S7, that the possession of chat- 
tels under a contract of sale without title 
is an indelible badge of fraud,— a doctrine 
repudiated quite generally by the courts of 
this country, and especially in this state. 
Runyon v. Groshon, 12 N. J. Eq. 8G; Broad- 
way Bank v. McElrath, 13 N. J. Eq. 24; Mill- 
er V. Pancoast, 29 N. J. Law, 2.5G. The doc- 
trine of the Pennsylvania courts is disapprov- 
ed by the American editors of Smith's Lead- 
ing Cases in the note to Twyne's Case, 1 
Smith, Lead. Cas. (8th Ed.) 33, 34; and by 
Mr. Landreth in his note to Lewis v. McCabe, 
21 Am. Law Reg. (N. S.) 221; but, neverthe- 
less, the supreme court of that state, in the 
latest case on the subject, — Forrest v. Nelson, 
decided February 16, 1SS5,— has adhered to 
the doctrine. It must therefore be regarded 
as the law of Pennsylvania that, upon a sale 
of personal property with delivery of posses- 
sion to the purchaser, an agreement that title 
should not pass until the contract price 
should be paid is valid as between the origi- 
nal parties, but that creditors of the pur- 
ebaser, or a purchaser from him bona fide 
by a levy under execution or a bona fide 
purchase, will acquire a better title than the 
original purchaser had, — a title superior to 
that reserved by his vendor. So far as the 
law of Pennsylvania is applicable to the 
transaction, it must determine the rights of 
these parties. 

The contract of sale between the Marvin 
Safe Company and Schwartz was made at 
the company's office in Philadelphia. The 
contract contemplated performance by the 
delivery of the safe in Philadelphia -to the 
carrier for transportation to Hightstown. 
When the terms of sale are agreed upon, 
and the vendor has done everything that he 
has to do with the goods, the contract of 
sale becomes absolute. Leonard v. Davis, 1 
Black, 476; 1 Benj. Sales, § 308. Delivery 
of the safe to the carrier in pursuance of 
the contract was delivery to Schwartz, and 
was the execution of the contract of sale. 
His title, such as it was, under the terms of 
the contract, was thereupon complete. 

The validity, construction, and legal effect 
of a contract may depend, either upon the 
law of the place where it Is made, or of the 
place where it is to be performed, or, if it 
relate to movable property, upon the law of 
the situs of the property, according to cir- 
cumstances; but, when the place where the 
contract is made is also the place of per- 
formance and of the situs of the property, 
the law of that place enters into and be- 
comes part of the contract, and determines 
the rights of the parties to it. Prazier v. 
Fredericks, 24 N. J. Law, 162; Dacosta v. 
Davis, Id. 319; Bulkley v. Hanold, 19 How. 
390; Scudder v. Union Nat Bank, 91 U. S. 
406; Pritchard v. Norton, 106 U. S. 124, 1 

ORiF.rF.i;s.n!oi'.— 9 



Sup. Ct. 102; Morgan v. New Orleans, M. 
&. T. R. Co., 2 Woods, 244, Fed. Cas. No. 
9,804; Simpson v. Fogo, 9 Jur. (N. S.) 403; 
Whart. Coufl. Laws, §§ 341, 345, 401, 403, 418: 
Parr v. Brady, 37 N. J. Law, 201. The con- 
tract between Schwartz and the company 
having been made and also executed in Penn- 
sylvania by the delivery of the safe to him, 
as between him and the company Schwartz's 
title will be determined by the law of Penn- 
sylvania. By the law of that state the con- 
dition expressed in the contract of sale, that 
the safe company should not relinquish title 
until the contract price was paid, and that on 
the failure to pay any of the installments 
of the price the company might resume pos- 
session of the property, was valid, as be- 
tween Schwartz and the company. By his 
contract, Schwartz obtained possession of 
the safe, and a right to acquire title on pay- 
ment of the contract price; but until that 
condition was performed the title was in 
the company. In this situation of affairs, 
the safe was brought into this state, and the 
property became subject to our laws. 

The contract of Norton, the defendant, 
with Schwartz for the purchase of the safe, 
was made at Hightstown, in this state. The 
property was then in this state, and the con- 
tract of purchase was executed by delivery 
of possession in this state. The contract 
of purchase, the domicile of the parties to 
it, and the situs of the subject-matter of pur- 
chase were all within this state. In every 
respect the transaction between Norton and 
Schwartz was a New Jersey transaction. 
Under these circumstances, by principles of 
law which are indisputable, the construction 
and legal effect of the contract of purchase, 
and the rights of the purchaser under it, 
are determined by the law of this state. By 
the law of this state, Norton, by his pur- 
chase, acquired only the title of his vendor, — 
only such title as the vendor had when the 
property was brought into this state and 
became subject to our laws. 

It is insisted that inasmuch as Norton's 
purchase, if made in Pennsylvania, would 
have given him a title superior to that of 
the safe company, that, therefore, his pur- 
chase here should have that effect, on the 
theory that the law of Pennsylvania, which 
subjected the title of the safe company to 
the rights of a bona fide purchaser from 
Schwartz, was part of the contract between 
the company and Schwartz. There is no 
provision in the contract between the safe 
company and Schwartz that he should have 
power, under any circumstances, to sell and 
make title to a purchaser. Schwartz's dispo- 
sition of the property was not In conformity 
with his contract, but in violation of it. His 
contract, as construed by the laws of Penn- 
sylvania, gave him no title which he could 
lawfully convey. To maintain title against 
the safe company, Norton must build up in 
himself a better title than Schwartz had. 
He can accomplish that result only by virtue 



130 



SALES. 



of the law of the jurisdiction in which he 
acquired his rights. 

The doctrine of the Pennsylvania courts, 
that a reservation of title in the vendor upon 
a conditional sale is void as against creditors 
and bona fide purchasers, is not a rule affix- 
ing a certain construction and legal effect to 
a contract made in that state. The legal ef- 
fect of such a contract is conceded to be to 
leave property in the vendor. The law acts 
upon the fact of possession by the purchaser 
under such an arrangement, and makes it 
an indelible badge of fraud, and a forfeiture 
of the vendor's reserved title as in favor of 
creditors and bona fide purchasers. The doc- 
trine Is founded upon consideration of public 
policy adopted in that state, and applies to 
the fact of possession and acts of ownersliii> 
under such a contract, without regard to the 
place where the contract was made, or its 
legal effect considered as a contract. 

In MacCabe v. BIymyre, 9 Phila. 615, the 
controversy was with lespect to the rights 
of a mortgagee under a chattel mortgage. 
The mortgage had been made and recorded 
in Maryland, where the chattel was when 
the mortgage was giveu, and by the law of 
JIaryland was valid, though the mortgagor 
retained possession. The chattel was after- 
wards brought into Pennsylvania, and the 
Pennsylvania court held that the mortgage, 
though valid in the state where it was made. 
Would not be enforced by the courts of Pcun- 
sylvania as against a creditor or purchaser 
who had acciuircd rights in the property aftor 
It had been brought to that state; that the 
mortgagee, by allowing the mortgagor to re- 
tain possession of the property, and bring it 
into Pennsylvania, and exercise notorious 
acts of ownershij). lost his right, under the 
mortgage, as against an intervening Pennsyl- 
vania creditor or purchaser, on the ground 
that the contract was in conti'avention of 
the law and policy of that state. Under 
subslanlially the same state of facts this 
court sustained tlio title of a mortgagee un- 
der a mortgage made In another state, as 
against a liona lido i)urchaser who had 
bought till' properly of the mortgagor In this 
state, for the leason that the possession of 
the chattel by the mortgMgor was not in con- 
travention of the public policy of this state. 
Parr v. P.iady, ;{7 N. J. I-jiw, 2(11. 

The public policy which has given rise to 
the doclrlne of the Pennsylvania courts Is 
local, ami the law which gives effect to It Is 
also local, and has no extraterritorial effect. 



In the case in hand, the safe was removed 
to this state Viy Schwartz as soon as he be- 
came the purchaser. His possession, under 
the contract, has lieen exclusively in this 
state. That possession violated no public pol- 
icy,— not the public policy of Pennsylvania, 
for the possession was not in that state; nor 
the public policy of this state, for in this 
state possession under a conditional sale is 
regarded as lawful, and does not invalidate 
the vendor's title imless impeached for actual 
fraud. If the right of a purchaser, under a 
purchase in this state, to avoid the reserved 
title in the original vendor on such grounds 
be conceded, the same right must be extend- 
ed to creditors buying under a judgment and 
execution in this state; for by the law of 
Pennsylvania creditors and bona fide pur- 
chasers are put upon the same footing. Nei- 
ther on principle, nor on considerations of 
convenience or public ijolicy, can such a 
right be conceded. Under such a condition 
of the law, confusion and uncertainty in the 
title to property would be introduced, and 
the transmission of the title to movable prop- 
erty, the situs of which is in this state, would 
depend, not upon our laws, Vnit upon the 
laws and public policy of sister states or 
foreign countries. A purcliaser of chattels 
in this state Avhich his vendor had obtained 
in New York, or in most of our sister states, 
under a contract of conditional sale, would 
take no title; if obtained under a conditional 
sale in Pennsylvania, his title would be good; 
and the same uncertainty would e.xist in the 
title of purchasers of property so circum- 
stanced at a sale under judgment and execu- 
tion. 

The title was in the safe company when 
the property in dispute was removed from 
the state of Penusylvauia. Whatever might 
impair that title — the continued possession 
and exercise of acts of ownership over it by 
Schwartz, and the purchase by Norton — oc- 
curred in this slate. The legal effect and 
consequences of those acts must be adjudged 
by the law of this state. By the law of this 
state it was not illegal nor contrary to public 
policy for the company to leave Schwartz in 
possession as ostensible owner, and no for- 
feiture of the company's title could result 
therefrom. By the law of this state, Norton, 
by his purchase, acipiired only such title as 
Schwartz had under his contract with the 
company. Nothing has occurred which by 
our law will give hini a better title. 

'I'lie Judgment should be reversed. 



CONDITIONS AND WARRANTIES. 



131 



DEXTER V. NORTON et al. 

(47 N. Y. 62.) 

Court of Appeals of New York. 1871. 

Action for damages for breach of a con- 
tract to sell and deliver cotton. The opin- 
ion states the facts. Judgment for defend- 
ant dismissing the complaint. 

James C. Carter, for appellant. Wm. W. 
.Mcl'arlane, for respondents. 

CHURCH, C. J. The contract was for the 
sale and delivery of specific articles of per- 
sonal property. Each bale sold was desig- 
nated by a particular mark, and there is 
nothing in the case to show that these marks 
■were used merely to distinguish the general 
kind or quality of 'the article, but they seem 
to have been used to describe the particu- 
lar bales of cotton then in possession of the 
defendant. Nor does it appear that there 
were other bales of cotton in the market of 
the same kind, and marked in the same way. 
The plaintiff would not have been obliged to 
accept any other cotton than the bales speci- 
fied in the bought note. 

Tlie contract was executory, and various 
things remained to be done to the one hun- 
dred and sixty-one bales in question by the 
sellers before delivery. The title therefore 
iliil not pass to the vendee, but remained 
in the vendor. Joyce v. Adams, 8 N. Y. 291. 

This action was brought by the purchaser 
against the vendor to recover damages for 
the non-delivery of the cotton, and the im- 
portant and only question in the case is, 
whether upon an agreement for the sale and 
delivery of specific articles of personal prop- 
erty, under circumstances where the title to 
the property does not vest in the vendee, and 
the property is destroyed by an accidental 
fire before delivery without the fault of the 
seller, the latter is liable upon the contract 
for damages sustained by the purchaser. 

The general rule on this subject is well 
established that where the performance of 
a duty or charge created by law is prevent- 
ed by inevitable accident without the fault 
of the party he will be excused, but where 
a person absolutely contracts to do a certain 
thing not impossible or unlawful at the time, 
he will not be excused from the obligations 
of the contract unless the performance is 
made unlawful, or is prevented by the other 
party. 

Neither inevitable accident nor even those 
events denominated acts of God will excuse 
him, and the reason given is, that he might 
have provided against them by his contract. 
Paradine v. Jane, Alejn, 27; Harmony v. 
Bingham, 12 N. Y. 99; Tompkins v. Dudley, 
2.-) N. Y. 272. 

But there are a variety of cases where the 
courts have implied a condition to the con- 
tract itself, the effect of which was to re- 
lieve the party when the performance had 
without his fault, become impossible; and 
the apparent confusion in the authorities has 



grown out of the difficulty in determining in 
a given case whether the implication of a 
condition should be applied or not, and also 
in some cases in placing the decision upon a 
wrong basis. The relief afforded to the par- 
ty in the cases referred to is not based upon 
exceptions to the general rule, but upon the 
construction of the contract. 

For instance, in the case of an absolute 
promise to marry, the death of either party 
discharges the contract, because it is infer- 
red or presumed that the contract was made 
upon the condition that both parties should 
live. 

So of a contract made by a painter to paint 
a picture, or an author to compose a work, 
or an apprentice to serve his master a speci- 
fied number of years, or in any contract for 
personal services dependent upon the life of 
the individual making it, the contract is dis- 
charged upon the death of the party, in ac- 
cordance with the condition of continued ex- 
istence, raised by implication. Cutter v. 
Powell, 2 Smith, Lead. Cas. .50. 

The same rule has been laid down as to 
property: "As if A. agrees to sell and deliver 
his horse Eclipse to B. on a fixed future 
day, and the horse die in the interval, the 
obligation is at an end." Benj. Sales, 424. 
In replevin for a horse and judgment of re- 
torno habendo, the death of the horse was 
held a good plea in an action upon the bond. 
Carpenter v. Stevens, 12 Wend. 589. In 
Taylor v. Caldwell, 3 Best & S. S3C, A. 
agreed with B. to give him the use of a 
music hall on specified days, for the purpose 
of holding concerts, and before the time ar- 
rived the building was accidentally burned. 
Hold, that both parties were discharged from 
the contract. Blackburn, J., at the close of 
his opinion, lays down the rale as follows: 
"The principle seems to us to be, that in 
contracts in which the performance depends 
on the continued existence of a given per- 
son or thing, a condition is implied that the 
imposslliility of performance, arising from 
the perishing of the person or thing, shall ex- 
cuse the performance."' And the reason giv- 
en for the rule is, "because from the nature 
of the contract, it is apparent that the par- 
ties contracted on the basis of the continued 
existence of the particular person or chat- 
tel." 

In School District v. Dauchy. 25 Conn. 530, 
the defendant had agreed to build a school- 
house by the 1st of May, and had it nearly 
completed on the 27th of April, when it was 
struck by lightning and burned; and it was 
held that he was liable in damages for the 
non-performance of the contract. But the 
court, while enforcing that general rule in a 
case of evident hardship, recognizes the rule 
of an implied condition in case of the de- 
struction of the specific subject-matter of the 
contract; and this is the rule of the civil 
law. Poth. Cont. Sale, art. 4, § 1, p. 31. 
We were referred to no authority against 
this rule. But the learned counsel for the 



132 



SALES. 



appellant, in his very able and forcible argu- 
ment, insisted that the general rule should 
be applied in this case. While it is difficult 
to trace a clear distinction between this case 
and those where no condition has been im- 
plied, the tendency of the authorities, so far 
as they go, is to recognize such a distinction, 
and it is based upon the presumption that the 
parties contemplated the continued existence 
of the subject-matter of the contract. 

The circumstances of this case are favor- 
able to the plaintiff. The property ^^■as mer- 
chandise sold in the marliet. The defendant 
could, and from the usual course of business 
we may infer did, protect himself by insur- 
ance; but in establishing rules of liability in 
commercial transactions, it is far more im- 
portant that they should be uniform and cer- 
tain than it is to work out equity in a given 
case. There is no hardship in placing the 
parties (especially the buyer) in the posiliou 
they were in before the contract was made. 
The buyer can only lose the profits of the 
purchase; the seller may lose tlie whole con- 
tract price, and if his liability for non-deliv- 
ery should be establislied, tlie eulianced val- 
ue of the property. After considerable re- 
flection, I am of the opinion that the rule 
here indicated of an implied condition in 
case of the destruction of the property bar- 
gained without fault of the party, will oper- 
ate to carry out the intention of tlio pnrties 
under most circumstances, and will be more 
lust than the contrary rule. The buyer can 
of course always protect himself against the 



effect of the implied condition, by a provision 
in the contract that the property shall be at 
the risk of the seller. 

Upon the grounds upon which this rule is 
bysed of an implied condition, it can malie 
lio difference whether the property was de- 
stroyed by an inevitable accident or by an 
act of God, tlie condition being that the prop- 
erty shall continue to exist. If we were cre- 
ating an exception to the general rule of lia- 
bility, there would be force in the consid- 
erations urged upon the argument, to lim- 
it the exception to cases where the property 
was destroyed by the act of God, upon 
grounds of public policy, but they are not 
material in adopting a rule for the construc- 
tion of the contract so as to imply a condi- 
tion that the property w&s to continue in 
existence. It can malce no difference how 
it was destroyed, so long as the party was 
not in any degree in fault. The minds of 
the parties are presumed to have contem- 
plated the possible destruction of the prop- 
erty, and not the manner of its destruction; 
and the supposed temptation and facility of 
the seller to destroy the property himself 
cannot legitimately operate to affect the 
principle involved. 

The judgment must be affirmed. 

ALLEN, GROVER, and RAPALLO, JJ., 
concur. PECKHAM and FOLGER, JJ., dis 
sent 

Judgment affirmed. 



CONDITIONS AND WAKRANTIES. 



133 



DORR V. FISHER. 

(1 Gush. 271.) 

Supreme Judicial Court of Massachusetts. Suf- 
folk and Nautucket. March Term, 1848. 

This was an action to recover the price of 
two tubs of butter. The plaintiff having 
been allowed, against objection ou the part 
of the defendant, to prove bis claim as a 
book account, the defendant then introduced 
evidence that In November, 1845, he offered 
several kegs of butter to the defendant for 
sale. On examining the butter, (two or 
three kegs only,) the defendant told the 
plaintiff that he was unable to decide wheth- 
er it was good or not, but that he wanted it 
of a flrst-rate quality. The plaintiff then 
said that he called the butter first-rate, and 
the defendant replied that. If it was good, 
the plaintiff might leave him two tubs. The 
two tubs were left at the defendant's store, 
where they remained for about a week, 
when the plaintiff came to the store, and 
some conversation ensued relative to the 
butter. The plaintiff was there again some 
time afterwards and requested that the but- 
ter should be put into the cellar. The prin- 
cipal question was as to the quality of the 
butter, and the evidence upon this point was 
conflicting. The defendant contended that 
the butter was sold under a warranty that 
it was of the best quality, and that the bur- 
den of proof was on the plaintiff to prove 
that It was of such a quality. Judge in- 
structed the jury that if the butter were 
sold with a warranty as to quality, or with 
a representation amounting to a warranty, 
the burden of proof was on the defendant to 
show that it was not equal to the warranty 
or representation. The jury returned a ver- 
dict against the defendant, who thereupon 
filed exceptions. 

T. Willey, for plaintiff. T. Wentworth, for 
defendant. 

SHAW, C. J. This cause has been argued, 
on the part of the defendant, as if the suit 
were brought upon an open, unexecuted con- 
tract for the purchase of goods; whereas 
the declaration is in indebitatus assumpsit 
for goods sold and delivered. To maintain 
this action, it is not necessary to set out the 
contract of sale, with its conditions and lim- 
itations; it is enough to prove an agreement 
for a sale of the goods, at a fixed price In 
money, or without a price, (in which case, 
the law implies an agreement to pay so 
much as they are worth,) and an actual de- 
livery, whereby a debt arises. A delivery 
by the vendor implies an acceptance by the 
vendee. An offer, by the vendor, not ac- 
cepted by the vendee, may be a good tender, 
and a good performance on his part, but it is 
not a delivery. If there are couditions an- 
nexed to the agreement of sale, respecting 
the quality, or other circumstances, which 



are not complied with by the vendor, the 
vendee should decline to accept the goods; 
but, if he does accept them, the acceptance 
is a waiver. And so, In an indebitatus a.s- 
sumpsit, for goods sold and delivered, the 
plaintiff must prove a delivery, or he will 
fail in the action. And this is not confined 
to the case of an implied assumpsit, on a 
quantum valebat; if the sale be made by an 
express contract, not under seal, and the 
goods are actually delivered, it is sufficient 
to allege that the defendant is indebted to 
the plaintiff for goods sold and delivered, 
and the law implies a promise to pay. No 
matter, therefore, what may have been the 
terms and conditious, under which goods 
are sold and delivered; if nothing remain 
but the obligation to pay for them, this is a 
debt, the existence of which supports the al- 
legation of being indebted, and supersedes 
the necessity of setting out specially such 
terms and conditions. 

"Where goods have been sold and actually 
delivered to the defendant, though under a 
special agreement, it is in general sutficient 
to declare on the indebitatus count, provid- 
ed the contract were to pay In money, and 
the credit be expired." 1 Chit. PI. 33S. 

This is not a mere technical rule of plead- 
ing, but a sound rule of law and justice, 
growing out of the nature of a sale. Were 
it otherwise, and were the plaintiff, after a 
delivery of goods on a contract of sale, 
bound to prove the terms and conditions of 
such sale, and to prove affirmatively that he 
had complied with those conditions, on his 
part, the result would be, that the vendee, 
having accepted the goods, as and for the 
goods contracted for, and without offering 
to return them, or giving notice to the ven- 
dor, to come and take them back, might hold 
and retain the goods, without paying any 
thing for them. The vendor could not re- 
cover them back in an action, because he 
has delivered them to the vendee, in pursu- 
ance of a contract, as his own. 

It is asked, then, has the vendee no rem- 
edy against the vendor, after delivery, if 
the vendee fails to derive the benefits, ex- 
pected and stipulated for on the sale? Cer- 
tainly not. If he has been deceived, as to 
the title, quality, or character of the thing 
purchased, he may rescind the contract, re- 
store or tender back the goods, and recover 
back the purchase money; or he may be 
secured by a warranty on the sale. The 
law, on the sale of personal property, im- 
plies a warranty of good title, so that if 
the vendee be deprived of his purchase by 
a paramount title, he has a remedy on his 
warranty. Or he may take an express war- 
ranty, as to the quality, condition, value, 
age, origin, or other circumstances resiject- 
ing the thing sold. But a warranty is a 
separate, independent, collateral stipulation, 
on the part of the vendor, with the vendee, 
for which the sale is the consideration, for 



134 



SALES. 



the existence or truth of some fact, relating 
to the thing sold. It is not strictly a condi- 
tion, for it neither suspends nor defeats the 
completion of the sale, the vesting of the 
thing sold in the vendee, nor the right to 
the purchase money in the vendor. And, 
notwithstanding such warranty, or any 
breach of it, the vendee may hold the goods, 
and have a remedy for his damages by ac- 
tion. 

But, to avoid circuity of action, a warran- 
ty may be treated as a condition subse- 
quent, at the election of the vendee, who 
may, upon a breach thereof, rescind the con- 
tract, and recover bacli the amount of his 
purchase money, as in case of fraud. But, 
if he does this, he must first return the 
property sold, or do every thing in his power 
requisite to a complete restoration of the 
property to the vendor, and, without this, 
he cannot recover. Conner v. Henderson, 
15 Mass. 319; Kimball v. Cunningham, 4 
Mass. r>02; Perley v. Balch, 23 Pick. 2S3. Such 
a restoration of the goods, and of all other 
benefits derived from the .sale, is a direct 
condition, without a compliance witli which, 
the vendee cannot rescind the contract, and 
recover bacli the money or other property, 
paid or delivered on the contract. 

But liis other remedy is by an action on 
the warranty, or contract of the vendor, on 
which, if there be a breach, he will recover 
damages to the amount of the loss sustained 
by the broach, whatever that may be. If it 
be a warranty of the quality of goods, and 
the breach alleged is, that the goods deliv- 
ered were inferior to the goods stipulated 
for, the damage will ordinarily be the ditTer- 
ence in value between the one and the oth- 
er. Such an action affirms instead of disaf- 
firming the contract of sale, leaves the prop- 
erty in the vendee, and gives damages for 
the breach of such separate, collateral con- 
tract of warranty. 

This remedy Is so familiar, that It scarce- 
ly rc'cpilres to be supported and explained 
by authorities. l?\it It nat\irally requires an 
action to be brought by the vendee against 
the vendor, which. If the vendor Is at the 
same time suing for the price, Is a cross 
action. 

But the KPneral tendency of modern Judi- 
cial decisions has Ijoen, to avoid circuity 
and niiiltliiliclty of actions, by allowing mat- 
ters growing out of the same transaction to 
be given In evidence by way of defence, In- 
stead of requiring n cross action, when It 



can be done without a violation of princi- 
ple, or great inconvenience in practice. 

And it has lately been decided, in this 
court, after consideration and upon a re- 
view of the authorities, that, when a cross 
action will lie for a deceit in the sale of a 
chattel, the deceit may be given in evidence 
in reduction of the damages, in a suit for 
the purchase money. Harrington v. Strai- 
ten, 22 Pick. 510. And the principles, which 
govern that case, are precisely applicable to 
the case, where a cross action will lie to re- 
cover damages on a breach of warrauty on 
a sale, and the same may be given in evi- 
dence, and a like amount deducted from the 
purchase money, in assessing damages in 
a suit by the vendor for the price. Poultou 
V. Lattimore. 9 B. & C. 259; Perley v. Balch. 
23 Pick. 2S3. 

It appears by the report in the present 
case, that these are the principles ou whiili 
the trial of the action proceeded. The plain- 
tiff must first have proved a sale and deliv- 
ery of the two tubs of butter. Some ob- 
jection was made to the plaintiff's account 
book; but it was not alluded to in the argu- 
ment. Indeed, the other proof tends to 
show, that the defendant agreed to take the 
two tubs of butter, and directed the plaiutiCC 
to leave them at his store, which the plain- 
tiff did the same day. No offer was made 
afterwards to return the butter. No notice 
was given to the defendant to take It away. 
This was evidence, from which a Jury might 
well infer a sale and delivery. The only 
way. then, in which the defendant could 
avail himself of proof of warranty of quali- 
ty, and a breach of it, was in obtaining a re- 
duction of damages, by way of set-off. in 
nature of a cross action, and as a substitute 
therefor. Had the defendant bmught his 
action, it is quite clear, th.at the burden of 
proof would have been on him to prove such 
warranty and breach, and the damage sus- 
tained by it. The burden was on him in the 
same manner, when ho resorted to this line 
of defence, as a substitute for a cross ac- 
tion. We are of oi)inion, therefore, that the 
direction of the judge was strictly correct, 
that If the article was sold to the defendant 
with a wiirranty as to Its quality, or with a 
representation amounting to a warranty, 
the burden of proof was on the defendant, 
to show that it was not equal to the war- 
ranty. 

Exceptions overruled and Judgment on the 
verdict 



coxj)It:ox- axi) wakuaxties. 



13i 



GOULD V. BOUUGKOIS. 

(18 Atl. Rep. 64, 51 N. J. Law, 361.) 

Suiiremc Court of New Jersey. June 17, 18S9. 

Rulo to sliow cause. 

Error to circuit court, Atlantic county; 
before .Justice Uked. 

Ar<jued at February Term, 1889, before 
Beasley, Chief Justice, and Justices De- 
PUE, Van Syc'kel, and Knapp. 

Lmming & Black, for tlie rule. D. J. 
Pancoast, contra. 

DEPTTE. J. This suit wns upon .1 prnmis- 
sory note made by the defendant. The de- 
fense was tlie want or failure of considera- 
tion. The city council of Holly Beach City 
proposed to build a brpalv water. The de- 
fendant was an applicant for a contract to 
do the worlc, and prepared and sent to the 
city council an asreenieiit with the city to 
that elfect. Members of tlie city council sent 
woril to the dt^fendant tliat the city had al- 
ready entered into a contract for tlie building 
of the brealiwater with Gould & Downs, that 
these parties could not fulfill their contract, 
and that, if the defendant would ni:ike a sat- 
isfactory arrangement with (jonld & Downs, 
the city would give hiui tlie contract. Tlie 
parties thereupon entered into negotiation, 
the conclusion of which was a contract in 
writing and under seal, whereby Gould & 
Downs, for the consideration of a note for 
;5375 and $500 in city bonds, assigned to the 
defendant "all our right, title, and interest 
in a certain contract entered into by the au- 
thorities of Holly Beach City and ourselves 
to build a certain breakwater ordered built 
by a resolution passed April 14, 1887." Sub- 
sequently, the city council, having obtained 
the opinion of counsel that the city had no 
power to build the breakwater, refused to 
ratify the arrangement of the defendant with 
Gould & Downs, and abandoned the project 
of constructing the work. The note sued 
on was given in compliance with the terms 
of this assignment. There was no proof of 
an express warranty by Gould & Downs of 
the validity of their ccmtract, nor any evi- 
dence from which fraud, either in represen- 
tation or concealment on their part, could be 
inferred. The power of the city to make the 
contract was not mooted until after these 
parties had concluded their arrangement 
and the assignment had been made; and, if 
tlie contract was invalid, its invalidity arose 
from the city charter, — a public act equally 
within the knowledge of both parties. The 
defendant's contention was that, inasmuch as 
there was a sale of the contract, a warranty 
that the contract was a valid contract was im- 
plied, and that, the contract being ultra vires 
on the part of the city, and void, the considera- 
tion entirely failed. If the proposition on 
which the defense was rested be sound in 
law, the defense was appropriate in this 
suit. The doctrine of implied warranty of 
title in the sale of goods applies as well to 



the sale of a chose in action, and extends not 
merely to the paper on which the those in 
action is written, but embraces also the va- 
lidity of the right purported to be transferred. 
Wood v. Sheldon, 42 N. J. Eaw, 421. Nor 
is there anything in the nature of the alleged 
infirmity of the contract that would b;ir the 
defense. In the ordinary case of a suit on a 
breach of warranty of title the validity of the 
vendor's title against the adverse claimant 
is triable, if the purchaser has in fact lost 
title, altliongh the transactions which deter- 
mine tlie vendor's title are res inter alios 
acta. If the contract which was the sub- 
ject-matter of the assignment was in fact 
ultra vires, a foundation was laid for this 
defense, tlie city having repudiated the con- 
tract in limine on that ground. 

The validity of the defense offered and over- 
ruled depends upon the fundamental propo- 
sition whether, under the circumstances of 
this sale, a warranty of title is implied in 
law. The theory on which a warranty of 
title is implied upon the sale of personal 
property is that the act of selling is an af- 
firmation of title. The earlier English cases, 
of which Medina v. Stoughton, 1 Salk. 210, 

1 Ld. Ilayui. 593, is a type, ailopted a dis- 
tinction between a sale by a vendor who was 
in possession and a sale where the chattel 
was in tlie possession of a third person; an- 
nexing a warranty of title to the former, and 
excluding it in the latter. In the celebrated 
case of Vasley v. Freeman, 3 Term R. 51, 
BuLLEK, J., repudiated this distinction. 
Speaking of Medina v. Stoughton, this 
learned judge said that the distinction did 
not appear in the report of the case by Lord 
Raymond, and he atlds: "If an allirmation 
at tlie time of the sale be a warranty, I can- 
not feel a distinction between the vendor's 
being in or out of possession. The thing is 
bought of him, and in consequence of his 
assertion; and, if there be any difference, it 
seems to me that the case is strongest against 
the vendor when he is out of possession, be- 
cause then the vendee lias nothing but the 
warranty to rely on." Nevertheless the En- 
glish courts continue to recognize the dis- 
tinction, with its incidents, as adopted in 
Medina v. Stoughton, to some extent, at 
least so far as to annex tlie incident of an 
implied warranty of title on a sale by a ven- 
dor in possession. Later decisions have 
placed the whole subject of implied warranty 
of title on a more reasonable basis. Mr. 
Benjamin, in his Treatise on Sales, after a 
full examination and discussion of the late 
Englisli cases, states the rule in force in 
England at this time in the following terms: 
"A sale of personal chattels implies an affir- 
mation by the vendor that the chattel is his, 
and therefore he warrants the title, unless it 
be sliown by the facts and circumstances of 
the sale that the vendor did not intend to as- 
sert ownership, but only to transfer such in- 
terest as he might have in the chattel sold." 

2 Benj. Sales, (Corbin's Ed.) §§ 945-961. 
In this country tlie distinction between sales 



136 



SALES. 



where the venJor is in ijoss'ssioii ami where 
he is out of possession, with respect to im- 
plied warranty of title, has been generally 
recoL'nizeil; but the tendency of ialer deiis- 
ions is against the recognition of such a fiis- 
tinetion, and favorable to the molern En- 
glish rule. Id. § %2, note 21. Bid. War. 
§g •J46, 247. The American editor of the 
ninth edition of Smith's Leading Cases, in 
the note to Chandelor v. Lopus, after citing 
the cases in this country which have held 
that the rule of caveat emptor applies to 
sales where the vendor is out of possession, 
remarks that in most of them what was said 
on that point was obiter dicta, and observes 
"that there seems no reason why, in every 
case where the vendor purports to sell an al)- 
solute and perfect title, he should not be held 
to warrant it." 1 Smith, Lead. Cas. (Ld- 
son's Ed.) 344. In Wood v. Sheldnn, supra. 
Chief .Justice Bfasm:y, in delivering the 
opinion of the court, adoi)ted, in terras, the 
rule stated by Mr. JJenjamin, and maiie it 
the foundation of decision. The precise 
question now under discussion did not then 
arise. In Eichholz v. Bannister, 17 C. B. (X. 
S.) 703-721, EiiLi:, C. J., said: "I consider 
It to be clear upon the ancient authorities 
that, if th" vendor of a chattel by word or 
conduct gives the purchaser to understand 
that he is the owner, that tacit representa- 
tion forms |)art of the contract; and that if 
lie is not the owner his contract is broken. 
* * * In almost; all the transactions of 
sale in common life, the seller, by the very 
act of selling, holds out to the buyer that he 
is the owner of the article he offers lor sale." 
In that case it was lield that on the sale of 
goods in an open shop or warehouse, in the 
ordinary course of business, a warranty of 
title was implied; but there is a line of En- 
glish cases holding that, where the facts and 
circumstances show that the purpose of the 
sale, as it must have been understood by the 
parties at the time, was not to convey an ab- 
solute and indefeasible title, but only to trans- 
fer the title or interest of the vendor, no 
warranty of title will be implied. In this 
proposition th(' fact that the vendor is in or 
out of possession is only a circuuistance of 
more or less weight, according to the nat- 
ure and circumstances of the parti<'ular 
transaction. Thus in ^lorley v. Attenbor- 
ough, 3 Exch. 500, the holding wiis that 
on a sale by a pawnbroker at public auction 
of goods pli'ilged to him in the way of 
business there was no implied warranty 
of ab.iolute title, liic underlaKing of the ven- 
dor being only that the subject, of the sale 
wa.s a pledge, and irredeemablo by the pledge- 
or. In Chapman v. Spcilh-r, 14 Q. B. I'>21, 
llif ili'fendaitt bought goods at a BherilT's 
sale fur I'lH. The plaintifT, who was pres- 
ent at the sherifT's sale, bought of tlii" do- 
femlant his barg.iin for C'i'.i. The iilain- 
tllT was afterwards forced to give up the 
goodn to the real owner. II" then sued 
the defendant, alleging a warranty of title. 
Xlio court belli that there Wius no imiilied 



warranty of title nor failure of consideiaf 'on; 
that the plaintifE paid the defendant, not for 
the goods, but for the right, title, and inter- 
est the latter had acquired by his purchase, 
and that this consideration had not failed. 
In Bagueley v. Hawley, L. R. 2 C. P. 625, a 
like decision was made, where the defendant 
resold to the phiintiff a boiler the former had 
bought at a sale under a distress for poor- 
rates, the plaintiff having knowledge at the 
time of his purchase that the defendant had 
bought it at such sale. In Hall v. Conder, 
2 C. B. (N. S.) 22, the plaintiff, by an agree- 
ment in writing by which, after reciting that 
he had invented a method of preventing 
boiler explosions, and had obtained a patent 
therefor within the United Kingdom, trans- 
ferred to the defendant "the one-half of the 
English iiatent" for a consideration to he 
paid. In a suit to recover the consideration 
the defendant [deaded that the invention was 
wholly worthless, and of no public utility or 
advantage whatever, and that the plaintilf 
was not the true and lirst inventor thereof. 
On demurrer the plea was held bad, for that, 
in the absence of any allegation of fraud, it 
must be assumed that the plaintiff was an 
inventor, and there was no warranty, ex- 
press or implied, either that he was the true 
and lirst inventor within the statute of James, 
or that the invention was useful or new; but 
that the contract was for the sale of the pat- 
ent, such as it was, each party having equal 
means of ascertaining its value, and each 
acting on his own judgment. A like decis- 
ion was made in Smith v. Aeale, 2 C. B. (N. 
S.) 67. 

Chief Justice Eule, in his opinion in Eich- 
holz V. Bannister, describes Morley v. At- 
tenborough. Chapman v. Speller, and Hall v. 
Conder, as belonging to the class of cases 
where the conduct ol the seller expresses, at 
the time of the contract, that he merely con- 
tracts to sell such title as he himself basin the 
thing. Theopinion is valuable, in that, while 
it rescues the eoiumon-law rule of implied 
warranty of title from the assaults of distin- 
guished judges who held that cai'eat emptor 
applied to sales in all cases, and that in the 
absence of express warranty or fiaud the 
purchaser was remediless, it also placed the 
rule under the just limitation that it sliouli'. 
not apply where the circumstances showed 
that tlie sale purported to be only a traiisler 
of the vendor's title. Expressions such as 
"if a man sells goods as his own, and the 
title is delieient. he is liable to make good 
the loss," (2 1!1. Comni. l.M.I or "if he sells 
as )iis own, and not as the agent of another, 
and tor a fair piice, he is uimerslood to war- 
rant the title, " (2 Kent, Comm. 478,)— as a 
statement of tin- principle on which the doc- 
trine of implied warraidy of lille rests, is not 
ineonsislent with thc^ principle adopted by 
Chief Justice Kki.k. Stating the princii)lein 
the negative form adopted in Mmli^y v. At- 
lenborough, that there is no undertaking by 
the vendor for tide unless there he an ex- 
press warranty of tith", or an eciuivaleut to it 



CONDITIONS AND WARKANTIES. 



137 



by declaration or conduct, affects only the 
order of proof. It was conceded in that case 
that the pawnbroker selling his goods under- 
took that they had been pledged, and weio 
irrt'fli'rmable by the pledseor, and if it be as- 
sumed, as I think ifraust be, that the act of 
selling amounts to an afiSrmation of title of 
some sort, but that its force and effect may 
be explained, qualified, or entirely overcome 
by the facts and circumstances connected with 
the transaction, the difference between Mor- 
ley T. Atlenborough and Eichholz v. Bannis- 
ter will rarely be of any pratical importance. 
The limitation above mentioned upon the 
doctrine that the act of selling is an affirma- 
tion of title has been adopted in this state. 
In Bogert v. Chrystie, 24 N. J. Law. 57-60, 
this court held that the general rule that the 
vendor of goods having possession, and sell- 
ing them as his own. is bound in law to war- 
rant the title to the vendee, did not apply 
where the vendor sells with notice of an out- 
standing interest in a third party, and sub- 
ject to that interest. In Hoagland v. Hall, 
38 N. J. Law, 351, the vendor agreed in 
writing to assign a lease he held upon cer- 
tain premises, and to sell and transfer goods 
and chattels mentioned in a schedule. The 
premises were a licensed inn and tavern, and 
in the schedule of the articles sold were 
enumerated "the licenses of the house. " The 
law under which the license was granted pro- 
hibited the transfer of a license, and in the 
purchaser's hands it would be void and value- 
less. The court held that that circumstance 
did not justify the purchaser in withdrawing 
from his contract; that there was no war- 
ranty by the vendor that the license, when 
assigned, would be of any value to the pur- 
chaser; and that the latter, having obtained 
by the assignment what he had bargained 
for, could not annul his contract unless he 
showed fraud or misrepresentation with re- 
spect to the subject-matter of the contract. 
In Bank v. Trust Co., 123 Mass. 330, the de- 
fendant had a contract" with B., Dledfiu" to 



him certain tobacco, In which It waa recited 
that the tobacco was B.'s own property, and 
free from all incumbrances, and made an as- 
signment to the plaintiff "of all his right, 
title, and interest in and under the contract, 
with all the property therein mentioned." 
The tobacco was then in the defendant's pos- 
session, and was delivered by him to the 
plaintiff. Afterwards a third person de- 
manded and recovered of the plaintiff part of 
the tobacco as his property, which had been 
pledged to the defendant without right. The 
plaintiff then sued the defendant on an al- 
legfd implied warranty of title. The court 
ruled adversely to the plaintiff's claim. In 
the opinion the court said that the written 
assii,'nment did not purport to be a sale of 
the goods, but of all the defendant's right 
under the contract, and its obvious purpose 
was to substitute the plaintiff in the place of 
the original pledgee, and that the fact that at 
the time of the transfer to the plaintiff the 
goods were in the actual possession of the 
defendant did not vary the case. 

In the case in hand the circumstances con- 
nected with the assignment, independent of 
the words "all our right, title, and interest," 
etc., contained in it, preclude the implication 
of a warranty of the validity of the contract. 
Taken in connection with the words of the 
assignment, the intention of the parties is free 
from doubt. 

The contention that the plaintiff was in 
fault in that he made no delivery of the con- 
tract to the defendant is without substance. 
The contract was neither produced at the 
negotiation between the parties, nor was it 
required. The transaction was the purchase 
of Gould & Downs' interest to consummate 
an arrangement whereby those parties were 
to be got rid of, that the city might give the 
defendant a contract. The defendant ob- 
tained by the assignment all he bargained 
for. The defense was properly overruled, 
and the rule to show cause should be dis- 
charged. 



138 



SALES. 



MOOKE r. McKINLAY ct al. 

(5 Cal. 471.) 

Supreme Court of California. Oct. Term, 1855. 

Appeal from the disti-ict court of the 
twelfth judicial district, San Francisco coun- 
ty. 

Hoge & Wilson, and Cook & Olds, for ap- 
pellants. Charles H. S. Williams, for re- 
spomlent 

MURRAY, C. J. This was an action In 
the court below, to recover the amount paid 
by the plaintiff to the defendants for the 
purchase of an invoice of garden seeds. 

It is in evidence, that after the arrival of 
the vessel, the plaintiffs were requested to 
open and inspect the seeds, but declined to 
do so, and paid for them. They were after- 
wards tested, and found to be almost wholly 
worthless. In order to maintain this action, 
the plaintiffs must show either an express 
or implied warranty. The sale note is as 
follows: "We have this day sold you two 
shipments of seeds for arrival." &c. 

The plaintiff maintains, that the word 
"seeds" thus used, amounts to an express 
warranty; that it has an express siguifl- 
oation. importing an article which will germ- 
inate or grow, and that it would be error to 
apply this term to any seeds not possessing 
these properties. And second, that if not an 
express warranty, the law will imply a war- 
ranty; or, in other words, raise the presump- 
tion, that the article sold is merchantable, 
and fit for the use for which It was sold. 

At common law. the rule caveat emptor 
applied to all sales of personal property, ex- 
cept where the vendor gave an express war- 
rantj", which is said to be such recommenda- 
tions or afflrraations, at the time of the sale, 
as are supposed to have Induced the pur- 
chase. To constitute a warranty, no pre- 
cise words are necessary; It will bo suffi- 
cient If the Intention clearly appear. 

During the time of Ix)rd Molt, the doctrine 
was established, that to warrant, no formal 
words were nec<>ssMry. and therefore a war- 
ranty might be Imiilled. from tJie nature and 
clrcumstMnccs of the ease, and the maxim 
was thus Introduced, that a sound price Im- 
portH a sound bargain or warranty. 

This doctrine was afterwanls exploded by 
Lord Mansfield, since wlilcli time It lias un- 
dorgone some modllhatlons In the English 
and American courts, tending In (he former 



somewhat and in some of the states of the 
Union, to the rule of civil law, which im- 
plies that the goods sold are merchantable, 
and fit for the purpose for which they were 
bought. 

The better opini-jn. however, I think, as 
deduced from English and American deci- 
sions, is that a warranty will not be im- 
plied, except in cases where goods are sold 
at sea, where the party has no opportunity 
to examine them, or in case of a sale by 
sample, or of provisions for domestic use. 

In Hart v. Wright. 17 Wend., 2G7, Judge 
Cowen reviews the former decisions of that 
state as well as the English cases, and ar- 
rives at the conclusion which I have stated. 
This case was afterwards brought before 
the court of errors of New York, and the doc- 
trine approved. 

In Moses v. Mead, 1 Denio, 385. the ques- 
tion again came before the supreme court 
of New York. In commenting on the deci- 
sions on this subject, Judge Bronsou says, 
"Some English judges have lately shown a 
strong tendency towards the doctrines of the 
civil law, in relation to sales, and have been 
disposed to imply warranties where none ex- 
ist. * * * I do not regret to find, that 
there are men in Great Britain who can look 
beyond the shores of that island; but I feci 
no disposition to follow them in their new 
zeal for the civil law, for the reason, that it 
is not our law in relation to sales in the 
best." 

The same doctrine is maintained in Fraley 
V. Bispham, 10 Pa. St. 320. and many other 
American decisions. There have been no 
departures from this rule in the decisions of 
this court. In the case of Flint v. Lyon. 4 
Cal. 17, the flour was describe^l as "Ilaxall " 
and we held, that this amounted to a w:n 
ranty, that the article sold was "Haxall.' 
and not a different brand or quality of Hour. 
In Rtiiz V. Norton, 4 Cal.. 3.")0. the sale note 
described the rice as "sound rice," which it 
was held amounted to a warranty. 

Testing the present case by the rale which 
we have deduced from the better authority 
of com-ts, the plaiiififT cannot recover. T!ic 
language used In the sale note cannot le 
tortured Into a wan-anty. and the fact thiit 
the plaintiff had an opportunity and declined 
to liisjiect the seeds before accepting them, 
takes the case from the operation of the rule 
of Implied wan'nnty. 

Judgment reversed, with costs. 

ITFYDRNFELDT, J., concurred. 



CONDITIONS AND WARRANTIES. 



i;39 



SINCLAIR T. HATHAWAY. 

(23 N. W. 409, 57 Mich. 60.) 

Supreme Court of Michigan. May 13, 1885. 

Error to Wayne; Jennison, Judge. 

Chapman & Smith, for appellant. Robert 
Laiillaw, for appellee. 

CAMPBELL, J. Plaintiff sued defendant 
for a balance claimed to be due for bread. 
Defendant claimed that the account had been 
balanced by bad bread returned, and by a 
sum of $10 jiaid in settlement of accounts. 
I'laiutifC was a baker, and defendant's busi- 
ness was to supply bread to customers about 
the city. It appears that for a period de- 
fendant was employed by plaintiff to sell his 
bread, and make returns and pay for the 
bread furnished daily. Defendant claims 
that on several occasions the bread furnished 
was bad and unwholesome, and that he re- 
turned it to a sufficient extent to overbalance 
his jjayments, and that tliere was an uuder- 
stauding to that effect. The parties are di- 
rectly at variance on the facts. There was 
a good deal of testimony showing that bread 
was often made unfit for use, and that plain- 
tiff had to sell it for feeding animals. He 
swore there was never any such thing. The 
court below rightly e.xcluded evidence of a 
Sunday contract before the business was en- 
tered into. But there was testimony of sub- 
sequent dealings tending to prove the theory 
of the defense. 

The case being an appeal from a justice, it 
was shown and seems to have been admitted 
that in the justice's court plaintiff swore that 
the amount due him was only $65, while in 
the circuit he swore to $103.79, and recovered 
it. The court was asked to charge the jury 
that if plaintiff so swore below, and so 
changed his testimony without explaining 
why, that circumstance should weigh with 
the jury against the good faith of the claim. 
The court refused so to charge, but in the 
charge the court made this remark: "De- 
fendant also states that the complainant only 
claimed $65 in justice court, but the com- 
plainant undertakes to explain it by saying 
that he made a mistake, as he did not have 



hi.s books of account with him at the time." 
This had a decided tendency to induce the 
jury to regard the po'ut as of no consequence. 
But it is not a small ma tier for a person 
who goes into court to swear to his claim, to 
pay so little regard to his oath as to take no 
pains to find out wliat is due. And beyond 
this, there is nothing in the plaintiffs testi- 
mony to show any such explanation given 
by him on oath. The error was material. 

The court also refused to charge that plain- 
tiff was .subject by law to an implied war- 
ranty that the bread was wholesome, and in 
the charge stated the defendant's objections 
to apply chiefly to its marketable quality, 
and to its being soiled externally by getting 
dirty on the floor. There was, however, tes- 
timony from several sources that the bread 
was unfit for food, apart from its external 
appearance. It was held in Hoover v. Pe- 
ters, IS Mich. 51, tliat there is an implied 
wai-ranty of wholosomeness in the sale of 
provisions for direct consumption. This ques- 
tion is not discussed, in plaintiff's brief, and 
was left entirely out of view by the court, 
and the only reference to it was in connec- 
tion with an express contract. 

In this case defendant was, as plaintiff 
claims, in his employ as a peddler, bound to 
pay for his bread, at a discount, and his con- 
nection with the sales brings the case within 
the same principle. Defendant cannot be 
treated as a purchaser from a wholesale deal- 
er of articles sold in the market for pui-poses 
of commerce. Bread is an article sold for 
immediate consumption, and never enters in- 
to commerce, and as one of the prime neces- 
saries of life is of no use unless it is good 
for food. Defendant, as a mere middle-man 
between the baker and the consumer, and 
acting in his employment, had a right to ex- 
pect bad bread to be made good, and the 
court should have so held. Mere externals 
he could see for himself, but bad quality 
would not always be detected without such 
a minute examination as the circumstances 
of such a business would render it difficult 
to make. 

The judgment must be reversed, and a new 
trial granted. 

The other justices concurred. 



140 



SALES. 



FIELDER V. STARKIN. 

(1 H. HI. 17.) 

Court of Common Pleas, Trinity Term, 17S8. 

This was an action on the warranty of 
a mare, "that she was sound, quiet, and free 
from vice and blemish." 

Plea, non-assumpsit, on which issue was 
joined.— 

The cause came on to be tried at the last 
assizes at Thetford, before Mr. Justice Asb- 
hurst, and a verdict found for the plaintiff. 
It appeared on the ti-ial, from the learned 
jud^'e's report, that the plaintiff had bought 
the mare in question of the defendant at 
Winnel fair, in the month of March, 17S7, 
for 30 guineas, and that the defendant war- 
ranted her soimd, and free from vice and 
blemish.— Soon after the sale, the plaintiff 
discovered that she was unsound and vicious 
^a), but kept her three mouths after this dis- 
covery, during which time he gave her phys- 
ic and used other moans to cure her. At the 
end of the three months he sold her, but she 
was soon returned to him as unsound. Aft- 
er she was so returned, the plaintiff kept her 
till the month of October 17S7, and then sent 
her back to the defendant as unsound, who 
refused to receive her. On her way back to 
the plaintiff's stable, the mare died, and on 
her being opened, it was the opinion of the 
faiTiers who examined her, that she had been 
unsound a full twelve-month before her 
death. It also appeared that the plaintiff 
and defendant had been often in company to- 
gether during the Interval between the month 
of March, when the mare was sold to the 
plaintiff, and October, when he sent her back 
to the defendant; but it did not appear that 
the plaintiff had ever in that time acquainted 
the defendant with the circumstances of her 
being unsound. 'ITie juiT found a verdict for 
the plaintiff with 30 guineas damages. 

Adair, Serjt., shewed cause. Le Blanc, 
Serjt., in support of the rule. 

Lord LOUGHBOUOUGH— Where there Is 
an express warranty, the warrantor under- 
takes that It Is true at the time of nmUIng It. 
If a horse which Is warrnnled sound at the 
time of sale, be proved to have been at that 



time unsound, it is not necessary that he 
should be retm-ned to the seUer. No length 
of time elapsed after the sale, will alter the 
nature of a contract originally false. Nei- 
ther is notice necessary to be given. Though 
I the not giving notice will be a strong pre- 
i sumption against the buyer, that the horse 
at the time of tlie sale had not the defpct 
complained of, and will make the proof on 
his part much more difhcult. The bargain 
is complete, and if it be fraudulent on the 
part of the seller, he will be liable to the 
buyer in damages, without either a retiu-n or 
notice. If on account of a horee warranted 
sound, the buyer should sell him again at a 
i loss, an action might perhaps be maiutaiuoil 
I against the original seller, to recover the dif- 
i ference of the price. In the present case it 
appears from the evidence of the farriers 
who saw the mare opened, that she must 
have been imsound at the time of the sale to 
the plaintiff. 

GOULD, J.— Of the s.nme opinion, remom- 
bered many cases of express warranty, where 
a retm-n was not held to be necessary. 

HEATH, .L— If this had been an action 
for money had and received to the plaintilT's 
use, an immediate return of the mare would 
have been necessary; liut as it is brought on 
the cxpioss warranty, there was no necessity 
for a return to make the defendant liable. 

WILSON, J.— Of the same opinion, recol- 
lected a cause tried before Mr. .Justice Biillor 
at nisi prius, whore the defendant had sold 
the plaintiff a pair of coach horses and war- 
ranted them to be six years old, which were 
In reality only four years old. It was con- 
tended that the plaintiff ought to have re- 
I turned the horses; but Mr. Justice Bullor 
held that the action on the warranty might 
be supported without a return. i As to part 
of the evidence l)oing contrary to the ver- 
dlce, the Jury have n right to use their dis- 
cretion either In believing or disbelieving 
any part of the testimony of witnesses. 

Rule discharged. 

J Soo Towers V. Hnrrptt, 1 Term R. p. 1.W, 
and Bucbannn v. I'arnshaw, 2 Term U. 745. 



PERFORMANCE OF CONTRACT. 



Ill 



BLOXAM et al. v. SANDERS et al. 

(4 Barn. & 0. 941.) 

King's Bench, Michaelmas Term, 1825. 

Trover to recover the value of a quantity 
of hops from the defendauts. At the trial 
before Abbott 0. J. at the London sittings, 
after last Trinity term, the jury found a ver- 
dict for the plaintiffs, damages £3000, subject 
to the opinion of this court upon the follow- 
ing case: The plaintiffs were assignees of 
J. R. Saxby, a banki-upt under a commission 
of bankrupt duly issued against him on the 
5th January 1824. The act of banlimptcy 
was committed on the 1st November 1823, 
the banlu'upt having on that day surrendered 
himself to prison, where he lay more than 
two months. The defendants were hop fac- 
tors and merchants in the borough of South- 
wark. Previous to his bankniptcy the bank- 
rupt had been a dealer in hops, and on the 
7th, 16th, and 23d August purchased from 
the defendants the hops (among others) for 
which this action was brought. Bought notes 
were delivered in the following form: "Mr. 
John Robert Saxby, of Sanders, Parkes, and 
Co. T. M. Simmons, eight pockets at 155s. 
Sth August 1823." Part of the hops were 
weighed, and an account of the weights was 
delivered to Saxby by the defendants. The 
samples were given to the bankrupt, and bills 
of parcels were also delivered to him in 
which he was made debtor for six different 
parcels of hops, the amount of which was 
£739. The usual time of payment in the trade 
was the second Satui-day subsequent to a 
pm-chase. Part of the hops belonged to the 
defendants, and part they sold as factors, but 
they sold all in their own names, it being 
the custom in the hop trade to do so. It was 
proved that the bauknipt had said more than 
once that the hops were to remain in the de- 
fendants' hands till paid for, and that he said 
so when he was about buying one of the par- 
cels of hops for which the action was 
brought. The bankrupt did not pay for the 
hops, and on the 6th September 1823 the 
defendants wrote to the bankrupt, and de- 
sired him to "take notice, that unless he paid 
for the hops they had sold him, on or before 
Tuesday then next, the defendants would 
proceed to resell them, holding him accounta- 
ble for any loss which might arise in con- 
sequence thereof." Before the bankruptcy 
the defendants did not sell any parcel of 
hops without the bankrupt's express assent. 
After the notice already stated the defend- 
ants sold some parcels of the hops, but in one 
instance the bankrupt refused to allow the 
defendants to sell a parcel of hops to a per- 
son named by them at the price offered, and 
that parcel was accordingly sold by the de- 
fendants, before Saxby's bankruptcy, to an- 
other person by Saxby's authority. On an- 
other occasion in the month of September 
the banlirupt had employed a broker to sell 
another parcel of the hops, but the defend- 
ants refused to deliver them without being 



paid for them. After the act of bankruptcy 
the defendants sold liops of the bankrupt's 
to the amount of £380 19s. 5d. The defend- 
ants delivered account sales of the hops so 
sold by them after the bankniptcy. The hops 
were stated to be sold for Saxby, and he 
was charged warehouse rent fi'om the 30th 
of August, and also commission on the sales. 
Besides the hops purchased from the defend- 
ants, the bankrupt placed in their warehouse 
nineteen pockets of hops for sale by them 
(as factors), of which fifteen pockets were 
sold on and after the 13th of January 1824 
of the value of £77 19s. 5d., and of which 
four remained in their warehouse at the time 
of the trial, which four were of the value of 
£14, and there were also unsold of the hops 
purchased from defendants seven bags, fifty- 
six pockets, of the value of £251 13s. 6d. 
There was a demand by plaintiffs of these 
hops, and a tender of warehouse rent and 
charges, and a refusal on the part of the de- 
fendants to deliver them, before action 
brought. The jury found that the defend- 
ants did not rescind the sales made by them 
to the banlii'upt. This case was argued at 
the sittings before last term, by 

Evans, for the plaintiffs. Abraham, con- 
tra. 

BAYLEY, J., now delivered the judgment 
of the court. This was an action of trover 
for certain quantities of hops sold by the de- 
fendants to Saxby before his bankruptcy, 
and for certain other hops which Saxby had 
placed in defendants' warehouses that di-- 
feudants in their character of factore might 
seU them for his use, and the question as to 
this latter parcel stands upon perfectly dis- 
tinct grounds from the question as to the 
others. This parcel consisted of nineteen 
pockets; defendants sold none of them until 
after Saxby's bankraptey, and then they sold 
fifteen pockets, not for the use of the assign- 
ees, but to apply the proceeds, not for any 
debt due to them In their character of fac- 
tors, but to discharge a claim they considered 
themselves as having upon Saxby in regard 
to the other hops; and the other foiu- pockets 
they refused to deliver to the assignees. It 
was candidly admitted upon the argument, 
and was cleai beyond all doubt, that the de- 
fendants were not waiTanted in applying the 
proceeds of the fifteen pockets to the purpose 
to which they attempted to apply them, and 
that they had no legal ground for withhold- 
ing the four pockets; and, therefore, to the 
extent of these nineteen pockets, the value 
of which is £91 19s. 5d., we think it dear 
that the plaintiffs are entitled to recover. 
The other quantities were hops Saxby had 
bargained to buy of the defendants on differ- 
ent days in August 1823, and for which de 
fendants had delivered bought notes to Sax- 
by. The bought notes were in this form: 
"Mr. J. R. Saxby. of Sanders, Parkes. .nnd 
Co., T. M. Simmons, eight pockets at 155s., 
8th August 1823." Part of the hop.s were 



142 



SALES. 



weighed, and an aeeoimt delivered to Sas- 
by of the weights, and samples were given 
to Saxby and invoices delivered. The bought 
notes were silent as to the time for deliver- 
ing the hops, and also as to the time for pay- 
ing for them, but the usual time for paying 
for hops was proved to be the second Satur- 
day after the purchase. It was also proved 
that Saxby had said that the hops were to 
remain with the defendants till they were paid 
for; but as the admissibility of such evi- 
dence was questioned, and in om* view of the 
case it is luinecessai-y to decide that point, 
I only mention it to dismiss it. (The learned 
judge then stated the other facts set out in 
the special case, and then proceeded as fol- 
lows.) Under these circumstances the ques. 
tion is, whether in respect of these hops the 
plaintiffs are entitled to recover. It was 
urged, on the part of the plaintiffs, that the 
sale of these hops vested the property in 
them in Saxby; that the hops were to be 
considered as sold upon credit, and that de- 
fendants had no lien therefore upon any of 
them for the price; that if they ever had 
any lien, it was destroyed as to those they 
sold by the act of sale, and that the plaintiffs 
were entitled to recover the full value of 
what were sold, without making any deduc- 
tion for the price which was unpaid. It is, 
therefore, material to consider whether the 
property vested in Saxby to any and to what 
extent; and what were the respective rights 
of Saxby and of the defendants. Where 
goods are .sold and nothing is said as to the 
time of the delivery, or the time of payment, 
and every thing the seller has to do with 
them is complete, the property vests in the 
buyer, so as to subject him to the risk of 
any accident which may happen to the goods, 
and the seller is liable to deliver them when- 
over they are deiiiaudod upon payment of 
the price; but the buyer has no right to have 
Iirissossion of the goods till he pays the price. 
The buyer's right in respect of the price la 
not a mere Hen which he will forfeit if he 
parts with the possession, but grows out of 
his original ownership and dominion, and 
payment or a tender of Ihi' price is a condi. 
tion precedent on tbe buyer's part, and until 
he makes such payment or tender he has no 
right to the iiossession. If goods arc sold 
upon credit, and nothing Is agreed u]Km as to 
the time of delivering the goo<ls, the vondeo 
Is Immediately eiilllled to the possession, and 
I lie right of i)ossosslon and the right of 
property vest at once In hini; but his right 
of possession Is not absolute, It Is U.-ilile to bo 
dofoaled If he becomes Insolvent liefore he 
iihtulns pfissesslon, 'I'ooko v. Uollirigsworth, 
.". T. n. ^1.1.— Whether dcf.nilt In payment 
when the credit expires will destroy his right 
..f pdssesslou, If lie has not before that lime 
obtained actual |M)Hsessloii. and juit him In 
ilie same slluatlon as If there had been no 



bargain for credit, it is not now necessary 
to inquire, because this is a case of insol- 
vency, and in case of insolvency the point 
seems to be perfectly clear, Hanson v. Meyer, 
6 East, 614. If the seller has dispatched the 
goods to the buyer, and insolvency occurs, he 
has a right in virtue of his original owner- 
ship to stop them in transitu, Mason v. Lick- 
barrow, 1 H. Bl. 357; Ellis v. Hunt, 3 T. 
R 4G4; Hodgson v. Loy, 7 T. R. 440; Inglis 
V. Usher wood, 1 East, 515; Bohtlingk v. In- 
glis, 3 East, 381. Why'? Because the prop- 
erty is vested in the buyer, so as to subject 
him to the risk of any accident; but he has 
not an indefeasible right to the possession, 
and his insolvency, without payment of tho 
price, defeats that right. And if this be the 
case after he has dispatched the goods, and 
whilst they are in transitu, a fortiori, is it 
when he has never parted with the goods, 
and when no transitus has begun. The buy 
er, or those who stand in his place, may still 
obtain the right of possession if they will 
pay or tender the price, or they may still act 
upon their right of property if any thing un- 
warrantable is done to that right. If, for in- 
stance, the original vendor sell when he 
ought not, they may bring a special action 
against him for the injury they sustain by 
such wrongful sale, and recover damages to 
the extent of that injm-y; but they can main- 
tain no action in which right of properly and 
right of possession are both requisite, unless 
thej' have both those rights. Gordon v. Har- 
per, 7 T. R. 9. Trover is an action of that 
description, it requires right of property and 
right of possession to support it. And this 
is an answer to the argument upon the charge 
of warehouse rent, and the uou-rcsciuding 
of the sale. If the defeiiilants were forced 
to keep the hops in tlioir warehouse longer 
thau Saxby had a right to require them, they 
were entitled to charge him with that ex- 
pense, but that charge gave him no better 
right of possession than he would have had 
If that charge had not been made. Indeed 
that charge was not made until after the 
bankruptcy, and until the defendants Insisted 
that tho right of possession was transferred 
to their second vendee. Then as to tho non- 
resclndlng of the sale, what can be Its effect? 
It Is nothing more than Insisting that the 
defendants will not release Saxby from the 
obligation of his purchase, but It will give 
him no right l)eyond the right his purchase 
gave, and that is n right to have the posses- 
sion on payment of the price. As that price 
has not boon paid or tendered, we are of 
oplnlciu that this action, which Is not an ac- 
tion for special damage by a wrongfid sale, 
but an action of trover, cnnnot, as to those 
hops, be mainlalMed. The verdict must, 
.therefore, be for the plaintiffs for the sum 
of £91. lOs. 5d. only. 
Judgment for the plalutlffa 



PEUFOUWANCE OF CONTRACT. 



14:i 



WOOD V. MANLEY. 

(11 Adol. & E. 34.) 

Court of Queen's Bench. Michaelmas Term, 
1839. 

Trespass for breaking and entering plain- 
tiff's close. Plea, (besides others not ma- 
terial here,) as to entering the close, that 
defendant, before the time when, &c., was 
lawfully possessed of a large quantity of 
hay, which was upon plaintiff's close, in 
which, &c., and that defendant, at the 
times when, &c., by leave and license of 
the plaintiff to him for that purpose first 
given and granted, peaceably entered the 
close, to carry off the said hay and did 
tlien and there peaceably take his said hay 
from and out of the said close, as he law- 
fully, &.C., which are the said alleged tres- 
passes, &c. Replication, de injuria. 

On the trial, before Erskine, J., at the Inst 
Somersetshire assizes, it appeared that tlie 
plaintiff was tenant of a farm, iucludiug 
the locus in quo; and that, his landlord 
having distrained on him for rent, the goods 
seized, comprehending the hay mentioned 
in the plea, were sold on the premises; the 
conditions of the sale being, that the pur- 
chasers might let the hay remain on the 
premises till the Ladyday following, (ISoS,) 
and enter on the i)remises in the mean- 
while, as often as they pleased, to remove 
it. The defendant purchased the hay at 
the sale: and evidence was given to show 
that the plaintiff was a party to these con- 
ditions. After the sale, on 2Gth January, 
180S, plaintiff served upon defendant a writ- 
ten notice not to enter or commit any tres- 
pass on his, the plaintiff's, premises. In 
February following, defendant served plain- 
tiff with a written demand to deliver up 
the hay, or to suffer him, defendant, to 
have access thereto and carry it away; 
threatening an action in default thereof. 
The plaintiff, however, locked up the gate 
leading to the locus in ijuo, where the hay 
was; and the defendant, on 1st March, 
ISoS, broke the gate open, entered the close, 
and carried away the hay. The learned 
judge told the jury that, if the plaintiff 
assented to the conditions of sale at the 
time of the sale, this amounted to a license 
to enter and take the goods, which license 
was not revocable: and he therefore di- 
rected them to find on this issue for the 
defendant, if they thought the plaintiff had 
so assented. Verdict for the defendant. 

Crowder now moved for a new trial, on 
the ground of misdirection. The learned 
judge appears to have considered that this 
case fell within the principle laid down in 
Winter v. Brockwell, 8 East, 308, that a 
license executed cannot be revoked. There 
the execution of the license took place by 
the defendant building in pursuance of the 
plaintiff's permission; so that the defend- 
ant had incurred an expense, upon the faith 
of the license, in doing the very thing which 



was liceused: and the action was for the 
thing so done. But this is not the case of a 
license executed before revocation: the plain- 
tiff revoked thepermission before the defend- 
ant acted uiwn it at all. On these plead- 
ings, the only question is, whether the act 
done by the plaintiff was licensed by the 
defendant. It may be that the defendant 
was entitled to bring trover, or perhaps to 
sue for breach of the conditions: but the 
license was revoked before it was execut- 
ed. [Lord DENMAN, C. J. If a man buys 
a loaf, and part of the bargain is, that he 
shall leave it at the baker's shop, and call 
for it, can the baker prevent his entering 
the shop to take the loaf?] Suppose a par- 
ty agrees to sell merchandise; if he after- 
wards refuse to sell, the buyer cannot take 
it. [Lord DENMAN, C. J. But here the 
sale was completed.] The ruling of the 
learned judge, if correct, would show that 
every case of contract created an irrevoca- 
ble license. [Lord DENMAN, C. J. Here 
the question is on the fact of the license.] 
The revocation of a license need not be 
specially replied: it may be shown under 
a traverse of the license. Besides, the rep- 
lication here puts the whole plea In issue; 
and the plea alleges a quiet entry, which is 
negatived by the gate being broken. A 
right of way may, perhaps, in some cases 
be enforced by violence, but not a license. 
[PATTESON, J., referred to Tayler v. Wa- 
ters, 7 Taunt. 381, (2 E. C. L. 405.)] The 
Vjuestion there was. whether a license to 
use real property could be given without 
writing; and it was decided that it could. 
Liggins V. Inge, 7 Bing. 682, (20 E. C. L. 
304,) 1 is to the same effect. 

Lord DENMAN, C. J. Mr. Crowder's ar- 
gument goes this length;— that, if I sell 
goods to a party who is, by the terms of 
the sale, to be permitted to come and take 
them, and he pays me, I may afterwards 
refuse to let him take them. The law coun- 
tenances nothing so absurd as this: a li- 
cense thus given and acted upon is irrevo- 
cable. 

PATTESON, J. Tayler v. Waters, 7 
Taunt. 374, (2 E. C. L. 405.) shows that a 
license to use a seat at the opera-house, 
paid for and acted upon by sitting there, 
cannot be countermanded. Here the con- 
ditions of sale, to which the plaintiff is a 
party, are, that any one who buys shall 
be at liberty to enter and take. A person 
does buy; part of his understanding is that 
he is to be allowed to enter and take. The 
license is therefore so far executed as to 
be irrevocable equally with that in Tayler 
V. Waters. The case put by Mr. Crowder 
is different. I do not say that a mere pur- 
chase will give a license: but here the 
license is part of the very contract. 

1 See Bridges v. Blanchard, 1 A- & E. 536, 
(28 E. O. L. R. 43.) 



144 



SALES. 



WILLIAMS, J. The plaintiff, having as- 
sented to the terms of the contract, puts 
himself Into a situation from which he 
could not withdraw. 

COLERIDGE, J. The pleadings raise the 
Issne whether, when the act complained of 
was done, the leave and license existed: 



it did exist If It was Irrevocable; and 1 
think it was irrevocable. Although no one 
of the cases referred to Is exactly the same 
as this, yet all proceed on the principle that 
a man, who, by consenting to certain terms, 
induces another to do an act, shall not aft- 
erwards withdraw from those terms. 
Rule refused. 



PERFORMANCE OF CONTRACT. 



145 



PAUL V. REB;D et al. 

(52 N. II. km;.) 

Supreme .Tndicial Court of Now Hampshire. 
Sullivan. June, 1872. 

Action by Azor Paul against Dexter G. 
Reed, defendant, and Dana R. Moody, trus- 
tee. Tlie trustee was held liable on the dis- 
closure, and defendant took exceptions. Ex- 
ceptions sustained. 

The disclosure of Moody, the trustee, show- 
ed that he succeeded defendant. Reed, as ten- 
ant of a boarding house, and when he was 
taking possession, and Reed was moving out, 
he agreed to pui'chase from Reed a hog, some 
sugar, and other articles. The agreed price 
of the articles was as follows: One hog, $10.50; 
flour, $7; butter, §10; bedstead, $1; sugar and 
salt, $1.80. Reed made a memorandum of 
the articles with the price carried out, and, 
as he was adding it up. the sheriff served 
the trustee summons on Moody. The hog had 
already been removed by Moody to another 
pen, and the sugar had been placed with 
Moody's other sugar. When the summons 
was served. Moody held the money in his 
hand, ready to pay for the articles as soon as 
the amount was ascertained. After service 
of process. Reed asked Moody to give the 
articles up, saying, "We can call it no sale, 
and I can take my stuff," giving as a reason 
that they were not yet paid for. Moody re- 
plied that he would take counsel, and, if it 
was safe for him to do so, he would give them 
up. He was advised to let the matter stand, 
as there would be a question as to his liability 
to be tried. Defendant, Reed, claimed the 
property, but the court held Moody to be 
chargeable with the $30.30, and defendant ex- 
cepted, and the question was reserved. 

Mr. Bowers, for plaintiff. S. H. Edes, for 
defendant and ti'ustee. 

BELLOWS, C. J. Unless the principal de- 
fendant had another hog and other provisions 
or fuel, so that the value of his provisions 
and fuel exceeded twenty dollars, all the ar- 
ticles sold to the trustee were exempt from 
attachment. As there is no proof that he had 
another hog, or more provisions, or fuel, the 
court cannot find that he had such; and, there- 
fore, unless the title in these goods had vested 
in the trustee so that he became indebted for 
them, the trustee must be discharged. 

The question then is, whether the goods 
were deUvered so as to vest the title in the 
trustee. 

The proof tends to show that the sale was 
for cash, and not on credit;— so the trustee 
testifies, and this is just what would have 
been intended had no time of payment been 
stipulatetl. 2 Kent, Comm. *490, *4<J7; .Story, 
Cout. § 796; Noy's Maxims, 87; Insurance 
Co. V. De Wolf, 2 Cow. 105. The case, then, 
stands before us as a contract of sale for cash 
on dehvery: in such case the delivery and 
payment are to be concurrent acts; and there- 
fore, if the goods are put into the possession 

GUIF. PEES. PROP. — 10 



of the buyer iu the expectation that he will 
inmicdiately pay the price, and he does not 
do it, the seller is at liberty to regard the de- 
livery as conditional, and may at once re- 
claim the goods. In such a case the contract 
of sale is not consummated, and the title 
does not vest in the buyer. The seller, may, 
to be sure, waive the payment of the p;ice, 
and agree to postpone it to a futm'e day, and 
proceed to complete the delivery; in which 
case it would be absolute, and the title would 
vest in the buyer. But in order to have this 
effect, it must appear that the goods were 
put into the buyer's possession with the in- 
tention of vesting the title in him. 

If, however, the delivery and payment wore 
to be simultaneous, and the goods were deliv- 
ered in the expectation that the price would 
be immediately paid, the refusal to make 
payment would be such a failure on the part 
of the buyer to perform the contract as to en- 
title the seller to put an end to it and re- 
claim the goods. 

This is not only eminently just, but it is in 
accordance with the great current of author- 
ities, which treat the delivery, under such cir- 
cumstances, as conditional upon the immediate 
payment of the price. 2 Kent, Comm. *107; 
Chit. Cent. (9th Am. Ed.) "SoO, note 1, and 
cases; Story, Cont. §§ 706, S04; Palmer v. 
Hand, 13 Johns. 434; Marston v. Baldwin, 17 
Mass. 605; Leven v. Smith. 1 Deiiio, 573. and 
cases cited. So the doctrine was fully recogniz- 
ed in Russell v. Minor, 22 Wend. 659. where, 
on the sale of paper, it was agreed that the 
buyer should give his notes for it on delivery, 
and the delivery was in several parcels. On 
delivery of the first, the seller asked for a 
note; but the buyer answered that he would 
give his note for the whole when the remain- 
der was delivered, and the parcel now deliv- 
ered could remain until then. When the rest 
was delivered, the defendant refused to give 
his note; and the court held that the delivei-y 
of all the goods was conditional, and that the 
seller might maintain replevin for all the 
goods. The general doctrine is fully recog- 
nized in this state in Luey v. Bundy, 9 N. 
H. 20S, and more especially iu Ferguson v. 
Chfford, 37 N. H. 86, where it is laid down 
that if the delivery takes place when payment 
is expected simultaneously therewith, it is 
in law made upon the condition precedent that 
the price shall forthwith be paid. If this con- 
dition be not performed, the delivery is in- 
operative to pass the title to the property, and 
it may be instantly reclaimed by the vendor. 

The question then is, whether the delivery 
here was absolute, intending to pass the title 
to the vendee and trust him for the price, or. 
whether it was made with the expectation that 
the cash would be paid immediately on the 
delivery. This is a question of fact, but it is 
submitted to the court for decision. Ordinarily 
it should be passed upon at the trial term; but 
where the question is a mixed one of law and 
fact, as it is here, it may not be irregular, if 
the judge thinks it best, to reserve the entire 



14! 



SALES. 



question for the -nbole court. Assuming tliat 
tlie Questions both of law and fact are re- 
served, we find tliat the goods were sold for 
cash, and of course that the delivery of the 
goods and the payment of the price were to 
be simultaneous, and accordingly, when a part 
had been delivered, and the seller was figuring 
up the amount, and the buyer had talien out 
his money to pay the price, the act was arrest- 
ed by the service of this process. 

The evidence relied upon to prove the de- 
livery to be absolute and intended to pass 
the title at all events, is simply and solely the 
changing of the hog into another pen, and 
mixing the sugar with other sugar of the buy- 
er. Without this mixing of the sugar, the case 
would be just the ordinary one of a delivery 
of the goods with the expectation tha,t the buy- 
er would at once pay the price; and we thinlj 
that circumstance is not enough to show a 
purpose to make the delivery absolute, but 
rather a confident expectation that the buyer 
would do as he liad agreed, and pay the price 
at once. The case of Henderson v. I^auck, 21 
Pa. St. 359, was very much like this. There 
was a sale of corn, to be paid for on the de- 
livery of the last load; and as the loads were 
delivered, the corn was placed in a heap with 
other corn of the buyer, in tlie presence of 
both parties. On the delivery of the last lot 
the buyer failed to pay, and the seller gave no- 



tice that he claimed the corn, and brought re- 
plevin, which was held to lie.— the court re- 
garding the delivery as conditional, and the 
plaintiff in no fault for the intermingling of 
the corn. It is very clear that the inter- 
mingling of the sugar does not, as matter of 
law, make the delivery absolute: and I think, 
as matter of fact, it is not sufficient to prove 
an intention to pass the title absolutely. When 
the buyer declined to pay the price, the seller 
at once reclaimed the goods, and so notified 
the buyer, who did not object to giving up the 
sale if he could safely do so. 

In respect to the question now before us, it 
is not material for what reason the buyer de- 
clined to pay for the goods, although the serv- 
ice of the trustee process might shield him 
from damages in a suit by the seller for not 
taking and paying for the goods. For the 
purposes of this question, it is enough that the 
buyer did not pay the price, and thus gave 
the seller a right to reclaim the goods, whioli 
he did at once. The goods themselves were 
exempt from attachment; and the fact that 
the trustee process was designed to intercept 
the i)rice of those goods, could not affect his 
right to reclaim tliem when the buyer declined 
to pay the price. 

The exception must therefore be sustained, 
and the 

Trustee discharged. 



PEHFORMANCE OF CONTRACT. 



147 



STEDMAN V. GOOCH. 

(1 Esp. 4.) 
Court of King's Boneh. May 14, 1793. 

This was an action of assumpsit for goods 
sold and delivered: tlie defendant pleaded 
1st, The general issue. 2dly, Coverture. Upon 
the first plea issue was joined; and to the 
second was a replication, "That at the time 
of the cause of action accrued, the defendant 
lived separate and apart from her husband, 
and had from him a seiiarate maintenance." 
Ujioii which plea, another issue was taken. 

The defence relied upon on the general issue 
by the defendant was, that the plaintiff in 
discharge of her bill, which was for millinery 
goods furnished to the defendant, had taken 
three promissory notes of one Finlay, pay- 
able at the house of a Mr. Browne, and 
liad given the defendant a receipt to that 
effect. 

Lord KENYON was of opinion that it then 
became incumbent on the plaintifC to prove, 
1st, that she had used due diligence to get 
the money from Finlay; and 2dly, that he, 
after notice, had made default in the pay- 
ment. 

To shew that she had used due diligence 
to get the money from Finlay, the plaintlfC 
proved that she had sent Finlay's notes to 
Browne, where they were made payable, 
and that he had been applied to respecting 
the payment: that in answer to that appli- 
cation he had said that he knew Finlay, but 
that he had no effects of his in his hands; 
nor could he pay them unless he had. 

Mingay, for the defendant, objected: That 
these declarations of Browne were not evi- 
dence of Finlay's default; that they were 
not bills drawn upon him, which he was 
bound to pay. but that he was only men- 
tioned, as his house was the place where the 
notes were to be paid. 

Lord ICENYON said, that it was the con- 
stant practice to make country bank bills and 
notes payable at certain houses in London; 
and though the persons at whose houses they 
were payable were not parties to them, nor 
personally liable, yet that an answer at such 
houses as to the payment or nonpayment of 
the bills or notes made payable there was 
sufficient He therefore held Browne's dec- 
larations to be admissible evidence of the 
probable nonpayment of the notes in question. 

To prove notice to this effect to Finlay, 
the plaintiff called a witness, who proved 
that she carried a letter from the plaintiff 
to Finlay, inclosing the notes, and informing 
him that they were returned as not being 
likely to be paid: that she went to the house 
where Finlay lodged, for the purpose of deliv- 
ering the letter to him; that she enquired for 
him from the woman who kept the house, 
and was informed that he was not at home; 
that she then left the letter inclosing the 
notes with this woman, and that the next 
morning the letter and bills were thrown 
into the plaintiff's house by some persons 



unknown. His lordship was of opinion that 
this was sufficiently presumptive proof that 
the letter had come to Finlay's hands, and 
therefore allowed it to be read. It was to 
the effect stated by the witness. 

It was then objected by the counsel for the 
defendant, that it appeared that these notes 
had been returned before they were payable; 
and that the plaintiff, having taken them in 
discharge of her debt, for goods sold, could 
not maintain an action on her original debt 
for the goods, until an actual default in the 
paj'ment of these notes given in discharge of 
it, as the notes might be paid when they be- 
came due; nor should the plaintiff be al- 
lowed to judge of the probable or improbable 
ability of the party to pay at a future day. 

Lord KENYON overruled the objection. He 
said that to this effect the law was clear, that 
if in payment of a debt the creditor is con- 
tent to take a bill or note payable at a future 
day, that he cannot legally commence an ac- 
tion on his original debt, until such bill or note 
become iDayable. or default is made in the 
payment; but that if such bill or note is of 
no value, as if, for example, drawn on a persnu 
who has no effects of the drawer's in his hands, 
and who therefore refuses it, in such case he 
may consider it as waste paper, and resort to 
his original demand, and sue the debtor on it. 

In proof of the issue arising on the second 
plea, "that the defendant lived separate and 
apart from her husband, and had from him 
a separate maintenance," Erskine, for the 
plaintiff, stated, that the evidence he had to 
that effect was, fii'st, a sentence of the eccle- 
siastical court, by which the defendant and 
her husband were separated; and secondly, as 
to the separate maintenance, that he would 
prove that she received from her husband a 
regular annuLty of £200 per ann., payable at 
a banking house in London. To prove the 
separation, he produced and proved the sen- 
tence of the spiritual court, by which a di- 
vorce a meusa & toro was pronounced be- 
tween the parties. 

Mingay objected to this, and obseiTcd that 
the production of the sentence alone was not 
sufficient evidence; that the libel and all the 
proceedings in that court should likewise have 
been produced. 

Lord KENYON seemed disposed to be of 
opinion that the sentence alone was sufficient, 
but reserved the point. 

In proof of the separate maintenance, the 

plaintiff called the clerk of Messrs. 's 

banking house. He swore that that house, by 
the direction and on the account of Mr. Gooch. 
the husband of the defendant, paid her £200 
per annum quarterly. He was asked if this 
payment was made in consequence of Mr. 
Gooch's verbal directions, or if the witness 
knew of anj' deed by which the payment of 
that sum was secured to her. He answered, 
that he knew of no such deed. Upon which 
Mingay objected: that this evidence was in- 
sufficient to support this part of the issue; 
that in this action the wife was to be charged 



US 



SALES. 



as a feme sole; that a feme covert had been 
so charged, by reason of her separate main- 
tenance being properly subject to no control 
from the husband, but exclusively her own; 
that in the present ease what was paid tc 
the defendant might be a mere gratuity re- 
vokable at pleasure, and not a property inde- 
pendent of the husband, by reason of which 
only she could be charged with her own 
debts; tbat in all cases of separate mainten- 
ance which had come before the court, the 
husband had secured by the intervention of 
trustees a separate maintenance to his wife, 
by which means only she could take from him 
a separate and independent property. lie 
therefore relied, that as no deed appeared in 
this case, that the defendant could not be 



deemed to have a separate maintenance in 
law as should subject her to the payment of 
her own debts. 

Lord KEXYOX was of opinion tliat it was 
necessary that the separate maintenance shoulil 
be secured by deed; but as the point had never 
been expressly decided, his lordship reserved it. 

Mr. Erekine and Mr. JIarryatt, for plaintiff. 
Mr. Mingay, for defendant. 

In the next term the two points so reserved 
came on before the court, when the other judg- 
es seemed to concur in opinion with Lord 
KENYON; but no judgment has been given.i 

1 But see the case of Marshall v. Rutton, since- 
determined, in B. R. 8 Term R. 545. 



I'ERFORMANCE OF CONTRACT. 



149 



PERLEY V. BALCH. 

(23 Pick. 283.) 

Supreme Judicial Court of Massachusetts. Es- 
sex. Nov. Term, 1839. 

Assumpsit on a promissory note. At the 
trial in the court of common pleas, before 
Williams, J., the defendant introduced evi- 
dence tending to prove, that the considera- 
tion of the note was the sale of an ox by 
the plaintiff to the defendant, with a war- 
ranty, that the ox would fatten as well as 
any one the defendant then had; that one 
eye of the ox, which was then apparently 
defective and diseased, was falsely and 
fraudulently represented by the plaintiff to 
have been hooked out, whereas, in fact, it 
had been destroyed by a cancer; and that 
this disease was incurable, and rendered the 
ox incapable of being fattened and entirely 
worthless for any other purpose. 

It did not appear, that the defendant had 
returned or offered to return the ox to the 
plaintiff, or had ever notified to the plain- 
tiff, that he was dissatisfied with the con- 
tract, until after the commencement of this 
action, which was several years after the 
sale. The defendant kept the ox in his 
pasture, &e., for several months, and was 
at some trouble to ascertain whether it 
would answer his purpose. It did not ap- 
pear what became of the ox afterwards. 

The defendant also offered evidence tend- 
ing to show, that he purchased the ox for 
the sole purpose of fattening it, and that 
this was known to the plaintiff at the time 
of the sale; and he contended, that, upon 
these facts, there was an implied warranty 
on the part of the plaintiff, that the ox 
should be reasonably fit for that purpose. 

The judge instructed the jury, that no 
such implied warranty arose from these 
facts; that if they were satisfied that the 
plaintiff warranted, that the ox would fat- 
ten as well as any one which the defendant 
then had, and that the warranty was false, 
or if they were satisfied, that the plaintiff 
falsely and fraudulently represented the eye 
of the ox to have been hooked out, where- 
by the defendant was induced to purchase 
it. and if they were further satisfied, that 
the ox, if it had been returned to the plain- 
tiff in a reasonable time, would have been 
of no pecuniary value to him, the defendant 
would be entitled to a verdict; but that, 
otherwise, their verdict should be for the 
plaintiff. 

The jury returned a verdict for the plain- 
tiff, and the defendant excepted to the in- 
structions to the jury. 

Mr. Lord, for plaintiff. Mr. Perkins, for 
defendant. 

ilORTON, J. The instruction, that there 
■ was no implied warranty, is not now com- 
plained of, and is undoubtedly correct. See 
Emerson v. Brigham, 10 Mass. 197; Shep- 
herd V. Temple, 3 N. H. 455. Every sale of 



chattels contains an implied warranty, that 
the property of them is in the vendor. But 
it is well settled by authority as a general 
rule, that no warranty of the quality, is 
implied from the sale. The maxim, caveat 
emptor, governs. 2 Kent, Comm. 478; Chit. 
Cont. 133; Champion v. Short, 1. Camp. r>?,; 
Bragg V. Cole, 6 Moore, 114; Stuart v. Wil- 
kins, 1 Doug. 20; Parkinson v. Lee, 2 East, 
314; Mockbee v. Gardner, 2 Har. & G. 170. 
But the learned justice of the common 
pleas further instructed the jury that if 
there was a fraud in the sale, or an express 
warranty and a breach of it. in either case, 
the defendant might avoid the contract, by 
returning the ox within a reasonable time; 
or, if the ox would have been of no value to 
the plaintiff, then without returning him. 
Whether the jury found their verdict upon 
the ground, that no fraud or express war- 
ranty was proved, or that the ox was of no 
value, does not appear. If therefore any 
part of the instructions was incorrect, the 
defendant is entitled to a new trial. 

Where the purchaser is induced by the 
fraudulent misrepresentations of the seller, 
to make the purchase, he may, within a 
reasonable time, by restoring the seller to 
the situation he was in before the sale, re- 
scind the contract, and recover back the 
consideration paid, or, if he has given a 
note, resist the payment of it. Here was 
no return of the property purchased, but if 
that property was of no value, whether there 
was any fraud or not, the note would be 
nudum pactum. The defendant's counsel, 
not controverting the general rule, objects 
to the qualification of it. He says, that the 
ox, though valueless to the defendant, might 
be of value to the plaintiff, and so the de- 
fendant would be bound by his contract, al- 
though he acquired nothing by it. But a 
damage to the promisee is as good a consid- 
eration as a benefit to the promisor. If a 
chattel be of no value to any one, it cannot 
be the basis of a bargain; but if it be of 
any value to either party, it may be a good 
consideration for a promise. If it is bene- 
ficial to the purchaser, he certainly ought to 
pay for it. If It be a loss to the seller, he 
is entitled to remuneration for his loss. 

But it is apparent, that a want of consid- 
eration was not the principal ground of 
defence. The defendant mainly relied upon 
fraud or a warranty. And to render either 
available to avoid the note, it was indis- 
pensable, that the property should be re- 
turned. He cannot rescind the contract, and 
yet retain any portion of the consideration. 
The only exception is, where the property 
is entirely worthless to both parties. In 
such case the return would be a useless cer- 
emony, which the law never requires. The 
purchaser cannot derive any benefit from 
the purchase and yet rescind the contract. 
It must be nullified in toto, or not at all. It 
cannot be enforced in part and rescinded in 
part And, if the property would be of any 



i;,i) 



SALES. 



beneUt to the seller, he is equally bound to 
return it. He who would rescind a con- 
tract, must put the other party in as good 
a situation as he was before; otherwise he 
cannot do it. Chit Cont. 276; Hunt v. Silk, 
5 East, 449; Conner v. Henderson, 15 Mass. 
.319. 

The facts relied upon by the defendant 
to defeat the note, might, if proved, be 
used in mitigation of damages. If there was 
a partial failure of consideration, or decep- 
tion in the quality and value of it, or a 
breach of warranty, the defendant may 
avail himself of it to reduce the damages to 
the worth of the chattels sold, and need not 
resort to an action for deceit, or upon the 
warranty. Chit Cont. 140; Germaine v. 



Burton, 3 StarUie, 32; Basten v. Butter, 7 
East, 480; Poulton v. Lattimore, 9 Baru. & 
C. 259; Bayley, Bills (2d Am. Ed.) 531, and 
cases cited. But he is not bound to do this. 
He may prefer to bring a separate action, 
and he has an election to do so. The pres- 
ent judgment will not bar such an action. 
But however this may be. It does not ap- 
pear, that any instructions were given or 
refused upon this point The value of the 
property to the defendant would have been 
the true rule of damages. And had he de- 
sired it, doubtless, such instructions would 
have been given. But as he did not request 
them, tie cannot complain of their omission. 
Judgment of the court of common pleas 
affirmed. 



PKIiFUllxMANCE OF CONTRACT. 



151 



GUION et ux. V. DOHERTY. 

(43 Miss. 538.) 

Siiprome Court of Mississippi. Oct., 1871. 

Error to the circuit court, Yazoo county; 
Campbell. Judge. 

Hudson & Nye, for plaintiffs in error. Wil- 
kinson & Bowman, for defendant in error. 

SIMRALL, J. Patrick M. Doherty, sur- 
vivor of the mercantile copartnership of P. 
O'Donnell & Co., sued John O. Guion and 
Mary, his veife, in assumpsit. The object of 
the suit was to reach the separate property 
of the wife, and subject it to the indebted- 
ness to the plaintiff. The declaration con- 
tains several counts: (1) On a promissory 
note made by John O. Guion, given, as aver- 
red, for sundry necessaries for the bonetit of 
the family, and separate estate of the wife; 

(2) on an account stated; (3) for plantation 
and family supplies, sold and delivered; (4) 
for similar supplies furnished in 1863. 
Pleas: (1) Non assumpsit; (2) that the 
plaintiff agreed to accept Confederate bonds 
or treasury notes, but now declined to do so; 

(3) by Mrs. Guion, coverture; (4) by Mrs. 
Guion, that the goods were sold and deliv- 
ered to John O. Guion on his sole credit, the 
plaintiff knowing that she had a separate 
estate, and with no intention to charge the 
same to her or her estate; (5) that plaintiff 
knew that she had separate property, and 
allowed her husband, as agent, to appropri- 
ate its proceeds to the support of the family, 
etc., and, knowing this, gave him, and not 
lier or her property, the credit, she being 
feme covert. Notice was attached that de- 
fendant would offer proof that the goods 
were sold at Confederate prices, and to be 
paid for in that currency. To the second, 
third, fourth, and flfth pleas the plaintiff de- 
murred, which was sustained to all except 
the fourth and. fifth, to which there were 
replications. The juiy found for plaintiff, 
whereupon a motion was made for a new 
trial, which was refused. 

Sundry eri-ors are complained of, growing 
out of the rulings on the pleadings, the in- 
structions to the jury, and the refusal to 
grant a new trial. The demurrer to the sec- 
ond plea was properly sustained. The plea 
sets up an agreement to take Confederate 
and other depreciated cun-ency, and that de- 
fendant, as soon as it could be obtained, in 
pursuance of the agreement, got and pre- 
sented to the plaintiff Confederate bonds or 
currency, which he refused and still refuses 
to take. Ti'eated as a plea of accord and 
satisfaction, it is imperfect. Whilst it avers 
the accord, it does not show satisfaction. 
An accord, to constitute a bar, must be full, 
perfect, and complete. Peytoe's Case, 9 Re- 
ports, 79; Lynn v. Bruce, 2 H. Bl. 317; Bal- 
ston v. Baxter, Cro. Eliz. 304. If accord is 
relied on, it must be executed. 3 Bl. Comm. 
15. Chief Justice Eyre, in Lynn v. Bruce, 



said: "Accord, executed, is satisfaction; ac- 
cord, executory, is only substituting one 
cause of action in the room of another, 
which might go on to any extent." In Alhn 
V. Harris, 1 Ld. Raym. 122, the judge de- 
clared the "contrary doctrine would over- 
throw all the books." Also, 1 Bac. Abr. OS; 
Kussell V. Lyles, 6 Wend. 391; Clark v. Dins- 
more, 5 N. H. 139. 

Nor is the plea suflicient as a tender. The 
allegation that "the defendant had the same 
in readiness and presentation for payment," 
etc., is not enough. If the thing is capable 
of being brought into court as a specie, bank 
notes, etc., the plea must be accompanied 
with the thing originally tendered. To com- 
plete the transaction, the tender must be 
made, and the party must be semper para- 
tus to pay if called on, and must repeat the 
tender with his plea. 

3. Nor is the plea of coverture a bar to the 
action. The contracts set out in the second, 
third, and fourth counts of the declaration 
are such as a wife who has a separate estate 
can make. 

4. There was no error in not applying tlie 
demurrer to the declaration. The argument 
addressed to us could have no effect, except, 
perhaps, as to the first count. But there 
were three good counts, and the rule is, if 
there be a demurrer to the entire declara- 
tion, and one count be good, the demurrer is 
not well taken. 

5. The instructions granted at the instance 
of the plaintiff clearly inform the jury what 
contracts a wife, having a separate estate, 
may make, so as to be oblig.atory on her 
and her property; and conclude with the 
direction that the jury must look to all the 
facts in evidence to determine to whom the 
credit was given, and to whom the plaintiff 
looked for payment. 

For Mrs. Guion, the court charged the jury 
to the effect that if Mr. Guion bought the 
goods on his own credit, and gave his indi- 
vidual note for them, then they must find for 
her, although part or all the goods were for 
her benefit, her children, and property. The 
jury must be satisfied that the credit was 
originally given to the wife, and that the 
plaintiff treated with and looked to her for 
payment. The wife is not liable for neces- 
saries, unless she expressly contracted for 
and consented thereto, or gave her. express 
consent to be charged therewitJ]. and the 
credit was given to her at the time. The 
duty of the husband is to provide for the 
support of his family, and the wife is not 
bound, unless she contracted for the same 
on her own credit, and with her consent was 
charged therewith, at the time. The jury 
are the sole judges whether the credit was 
given to the husband or the wife. 

Thirty-odd instructions were proposed for 
Mrs. Guion, nearly Ul of them granted in the 
words selected by counsel. The central idea 
in most of them was. to whom was the cred- 
it given,— to the husband or to the wife? 



SALES. 



The purpose of the charges of the court is to 
instruct the jury iu the law applicable to the 
case. Whether this can be done better by 
presenting the same, or nearly the same, 
ideas, in various forms of language, is ex- 
ceedingly doubtful. It might tend to em- 
barra.ss and confuse the minds of noupio- 
fessional men, as are jurors, rather than to 
convey to them a clear comprehension of the 
rules of law to be applied to the facts 
proved. The jury could hardly have failed 
to see that the point of the defense was that, 
although Mrs. Guion owned separate proper- 
ty, yet, if the goods were taken up for fam- 
ily supplies, or for the use of her property, 
she was not responsible, unless they were 
bought with her consent, and on her credit. 

0. The only remaining question is, does the 
testimony prove or tend to prove that the 
goods were for the use of the wife's planta- 
tion, and of hereelf and family, and were 
they sold on her credit? In reviewing the 
verdjet of the jury, according to repeated de- 
cisions of this court, we will not consider 
the tostimon.v with the view of determining 
whether our judgment would concur with the 
jury, but only to see whether there was suffi- 
cient evidence fairly to suppurt the verdict. If 
there be conflict between the witnesses, the 
jury were in more favorable circumstances 
to elicit the truth than this court. The tes- 
timony was that the wife owned a planta- 
tion, used iu tlie cultivation of cotton; that 
the plaintiffs were the merchants by whom 
the business was done, the husband being 
the'aotive manager. The business was con- 
tinued through several years, the crops of 
cotton being delivered to the plaintiffs, and 
the proceeds applied as credits on the ac- 
counts. 

P. W. Doherty, plaintiff, describes the 
transactions thus: .John O. Guion had no 
property, and was engaged in no business 
from which he realized an income. The 
goods sold to him were solely on the credit 
of his wife's separate property. The hus- 
l)and owned nothing. From the beginning 
of I lie business, the accounts made by Guion 
were paid and settled by his wife's cotton, 
sent to plalnlifTs for sale or shipment, and 
the proceeds placed to credit of the accounts. 
The purchase of supplies, and the shipment 
and .sale of Mrs. Giilon's cotton, was done 
through the hu.ibaiid. Neither husband nor 
wife ever coniplniiied of this mode of doing 
the busliii'ss. Plainlifl' kept accounts with 
the husbands of a great many wives who 
lind sepnnite estates, Just as the accrounts 
were kept with .Mr. Guion. In nil such 
enxps the credit was given on the faith of 
the wife's properly. rialnlKTH knew that 
Guion had no properly. The creillt was giv- 
en on nccouiit of llie wife ;ind her jiropiM'ty. 
No credit could have been given to the hus- 
band. In payment of taxes on wife's prop- 
erty, the receipts were taken In the name of 
the hUHband. 

John O. Guion, defendant, deposed that he 



supposed credit was given to himself. Never 
mentioned anything about wife's separate 
property. Never told plaintiffs he was agent 
for his wife. His wife never formally made 
purchases, nor gave any orders. She never 
authorized witness to Viuy anything on cred- 
it. He bought all supplies on his credit, and 
paid for them out of tJie proceeds of wife's 
crops. Owned no land. Had, when married, 
carriage and horses, and some money, etc. 
Never owned any other property after the 
marriage. Had no other business than to at- 
tend to his wife's plantation. Shipped her 
cotton, and drew drafts in his name. All 
this was done with her knowledge and con- 
sent, etc. 

Aside from the other testimony, a jury 
might well conclude from this witness' state- 
ment that he had his wife's consent to buy 
on credit and pay with her means. It would 
not be a strained inference that he was recog- 
nized by the wife as her agent to buy sup- 
plies for the plantation and family on a 
credit, and apply the crops in payment. He 
deposes that such was his practice, with the 
knowledge and consent of his wife. We have 
referred to thus much of the evidence to 
show that the jury were justified in coming 
to the conclusion that they reached, and that 
we would transcend the boundary whicli 
divides the duties of judges and juries if we 
should interfere with this verdict on the 
ground of being against the great preponder- 
ance of the testimony. It Is claimed that the 
acceptance by the plaintiff of the promissory 
note of John O. Guion was a merger of the 
open accounts Into a security of higher dig- 
nity, and therefore, if Mrs. Guion was orig- 
inally liable, she has thereby been dischar- 
ged. In the case of Peter v. Bercely, 10 Pet. 
567, the executors of Peter gave notes to the 
bank iu lieu of or renewal of the debts of 
their testator. It was contended that there- 
by the debt due from tlie estate of the tes- 
tator was extinguished. Not so held the 
court, unless the creditor accepted the notes 
in satisfaction of the original debt, and look- 
ed alone to the makers of the notes for pay- 
ment 

In James v. Hackly, 10 Johns. 277, Spen- 
cer, C. J., for the court, said: "The accept- 
ance of a negotiable note for an antecedent 
debt will not extlngtiish such debt, unless it 
Is expressly agreed that it Is accepted as pay- 
ment." 

In Glenn v. Smith, 2 Gill >^- J. r,OS. one 
John Hcsllp received the notes of Ann Ilas- 
lelt for a debt against the estate of Wm. 
Ilaslett, deceased, and surrendered an ac- 
count receli)ted. In the absence of all evi- 
dence except I ho receipt writ! en at the bot- 
tom of the account, it was said by the court 
to be clear that (he note of Ann Ilaslelt did 
not extinguish the claim agalii.st the estale. 
The general rule Is slated to be, "that the 
acceiitance of a secnrily of cquiil dignity Is, 
of itself, no extinguishment of the antece- 
dent debt." 



PEltrORMANCE OF CONTUACT. 



53 



I'he acceptance, by a creditor, of the prom- 
Issoiy note of his Uebtor for an antecedent 
simple contract debt, does not extinguish the 
uiiginal debt (for both are of equal degree in 
legal contemplation), if it remains in the 
hands of the creditor, unpaid, and he can 
produce it to be canceled, or show that it is 
lost. There are cases which hold the rule to 
be the same if the note of a third person is 
taken, unless the creditor parts with it, or is 
chargeable with some laches with respect to 
it. 5 Tei-m K. 513; Pinckford v. Maxwell, 6 
Term R. 52; Bishop v. Rowe, 3 Maule & 
S. 3G2. 

If however, there be an agreement by the 
creditor to receive it absolutely as payment, 
and to incur the risk of its being paid, the 
note, either of a debtor or of a stranger, oper- 
ates as an extinguishment or satisfaction of 
the precedent debt. T Term R. 60; Toby v. 
Barbee, 5 Johns. 68; John v. Weed, 9 Johns. 
310. In the case of Glenn v. Smith, 2 Gill & 
J. 493, the expression, "in payment of the 
above account," was held not to be sufficient 
evidence of an absolute discharge of the 
original debt. In the case cited from 6 Term 
R. .j2. Lord Kenyon said: "If the bill which 
is given in payment does not turn out to be 
productive, and is not what the creditor ex- 
pects it to be, it may be considered as if no 
such bill had been given." It is claimed in 
argument that the decisions of our predeces- 
sors in the case of Slocumb v. Holmes, 1 How. 
(Jliss.) 144, and Myers v. Oglesby, 6 How. 
(Miss.) 50, declare a contrary doctrine. The lat- 
ter case has no application, for in that case a 
bond was executed for the parol debt, and it 
was, therefore, the case of the merger of an 
inferior into a higher security, which ex- 
tinguished the former. Nor does the former 
case, considered and construed by the facts 
before the court, militate against the cur- 
rent of authority from Westminster Hall 
and elsewhere. "The plaintiff declared on a 
promissoiy note, and also work and labor 
done, and goods sold and delivered. Among 
other matters, the defendant pleaded that the 



account filed was closed by the note declared 
on in the first count in plaintiff's declara- 
tion." The controversy was whether the note 
was given for the account, the plaintiff in- 
sisting that the note had no connection with 
the account, but rested on a ditferent con- 
sideration. In this aspect of facts, the cir- 
cuit court charged the jury that, if the note 
was given for the account, then the plaintiff 
could not recover on the account, which in- 
struction was sustained as correct. 

The case of Taylor v. Conner, 41 Miss. 728, 
holds that neither the note of the debtor nor 
that of a stranger will be a payment of the 
antecedent liability, unless accepted as such. 

Objection was made to the reading of the 
note of Guion to the jury. The note of 
John O. Guion created no liability on his 
wife, and could not be evidence of any. The 
first coimt does not disclose a good cause of 
action against the wife. But the presence 
of the note on the trial, and before the jury, 
was proper enough as an element in the 
cause. Whether this paper was in absolute 
satisfaction for the goods sold and delivered, 
it was a fact in the cause,— part of the res 
gesta3 of the pleadings between the parties, 
tending to help the elucidation of the propo- 
sition whether the goods were supplied on 
the sole credit and responsibility of the hus- 
band or on the faith of the wife's property 
and her credit 

The suggestion was made at the bar by the 
counsel for the plaintiff in error that there 
were features in this case materially dis- 
tinguishing it from others in this court which 
dismissed the liabilities of married women, 
and we were invited to a very careful con- 
sideration of it. We have maturely exam- 
ined the record and arguments of counsel, 
and are well satisfied that justice has been 
done, and that no eiTor has bien committed 
to • the prejudice of the complaining party 
which would warrant this court in setting 
aside the verdict and judgment of the cir- 
cuit coui-t. 

Let the judgment be affirmed. 



154 



SALES. 



CLARK T. DRAPER. 

(19 N. H. 419.) 

Superior Court of New Hampshire. Hillsbor- 
ough. July Term, 1S49. 

TroTCr by one Clark against Aarson Draper 
for a pair of oxen. A verdict was taken by 
consent for plaintiff, on whicb judgment was 
to be entered, or the verdict was to be set 
aside and judgment entered for defendant, as 
the opinion of the court should be upon the 
whole case. Verdict set aside, and judgment 
for defendant. 

Plaintiff purchased the oxen in suit of de- 
fendant for ^00. giving his note for that 
amount, and defendant agreeing to keep the 
oxen for plaintiff until the following Saturday. 
At the same time defendant gave to plaintiff 
some brass knobs, which he said the oxen wore 
on their horns. Subsequently plaintiff sent for 
the o.xen, and defendant refused to give them 
up without receiving the money for them, 
whereupon this action was instituted. 

Jlr. Pierce, for plaintiff. Mr. Sawyer, for 
defendant. 

WOODS, J. This is an action of tiover, and 
the plaintiff, in order to maintain it, must have 
either a special or general property in the thing 
demanded, together w-ith the right of imme- 
diate possession. The property may be abso- 
lutely his, yet another may have had such a 
right to the possession of it when the demand 
was made and the action brought, that the 
plaintiiT could not, against the will of such 
person, lawfully have talcen it into his pos- 
session, and cannot, therefore, maintain the 
present action, founded, as it is, upon the as- 
sumption that his right to possess the chattels 
has been violated by the defendant. 

It appcar.s that In the month of September, 
1S47, the plaintiff bought the oxen of the de- 
fendant for sixty dollars, who agreed to keep 
them till the following Satiuday for the plain- 
tiff, at his re(iuest. No money or other thing 
wa.s paid for the oxen, and no credit was stip- 
ulated for. Now that transaction constituted 
a sale of the chattels from the defendant to 
the plaintiff, who thereupon became the owner 
of them. A loss or desliiiction of them, or 
any damage happening to them afterwards, 
would have been the loss or detiiment of the 
purcha.ser and not of the seller, and the claim 
of the latter tor the price would have been In 
no wise affected by such an occurrence. 1 
Inst. LM,.'!. 

Hut niitwithst.'indhig such change of prop- 
erly or ownerRlilp, the vendor had a right to 
retain the oxen till the price was paid. This 
lieu of the vendr)r uimn the goods sold for the 
payment of the purchase' money, lins been 
jmlversally rrcognlzcd at rnnunon law, and its 
Iirlncliiit-s sonu'wluit extensively disius-si'd In 
the cases. It will be sullli'ient to cite one or 
two of them. 

A hop merchant sold to H. on diverse days 
In August, various jiarcels of hops. Part of 
them were welglu'd jind an account of the 



weights, together with samples, delivered to the 
purchaser. The usual time of payment with 
the trade was the second Saturday subsequent 
to the sale. B. did not pay for the hops at the 
usual time, whereupon A. gave notice that un- 
less they were paid for by a certain day they 
would be re-sold. The hops were not paid for. 
and A. re-sold a part, with the consent of B.. 
who afterwards became a banknipt. and then 
A. sold the remainder of the hops without 
the consent of B. or his assignees. Account 
of the hops so sold was delivered to B., in 
which he was charged warehouse rent from 
the oOth of August. The assignees of B. de- 
manded the hops of A., and tendered the 
charges of warehouse rent, &e., and on the 
refusal of A. to deliver them, brought trover. 
it was holden that the assignees could not 
maintain the action, because the party must 
have for that purpose, not only a right of prop- 
erty but a right of possession; and that al- 
though a vendee of goods acquires a right of 
property by the contract of sale, yet he does 
not acquii'e a right of possession to the goods 
until he pays or tenders the price. Bloxam v. 
Sanders, 4 B. & C. 941, 10 Eng. G. L. Rep. 
SOS. 

Nor as between the original vendor and ven- 
dee is the lien of the former divested by his 
giving to the vendee a delivery order for the 
goods sold, but remaining in the vendor's ware- 
house rent free, altliough it appeared that by 
the usage of trade in I.iveipi'ol, where the par- 
ties dealt, goods sold while in warehouse are 
delivered by the vendor's banding to the ven- 
dee a delivery order, and that the helder of 
such order may obtain credit with a purchaser. 
as having possession of the goods. Townley 
V. Crump, 4 Ad. & El. 5S. 

To the same effect is tlie case of Tooke v. 
Hollingworth, 5 Term R. 215. 

The doctilne is fully established in this state 
by the case of Williams v. Moore, 5 N. H. 235. 

That there was no actual delivery in this 
case, so as to destroy the lien, of the defendant 
for the price, is clear. And the delivery of 
a part as and for the whole, or a symbolical 
or constructive delivery, if suHiclent for such 
an effect, is not made out by the delivery of 
the brass knobs that had been worn upon the 
horns of the oxen. They were not delivered 
with the intention of thereby making a tradi- 
tion of the oxen, which Is the essence of a 
symbolical delivery. But the cases plainly 
show that the lien Is presen'ed upon all and 
every parcel of the goods sold which actually 
remain In the hands of the vendor. 

Nor can the giving of the note for the price, 
payable on deuiaiul, in any view, be consid- 
ered as n payment of the price. The doctrine 
on this hojid was fully considered and settled 
In .lalTrey v. Corni.sh, 10 .\. II. .">05, where It 
was held th.'it a luomlNsory note given for the 
amount of n parly's taxes, was not a payment 
of the taxes for the purpose of gaining a set- 
tlement. The l.'ililiig (if a note Is In no case 
the paynieiit of a debt, unless there be a spe- 
cial agreement to lli:it elTect. The present 1» 



lUGIITS OF SELLER AGAINST GOOl^S— VENDOR'S LIEN. 



15 



a strong nnd clear case for the application of 
tbat doctriue; and distinct proof that tlie par- 
ty taking the note intended thereby to part 
with his lien upon the property, would be re- 
quired. 



The conclusion, therefore, is, that the pres- 
ent action cannot, upon the evidence reported, 
be maintained; that the verdict must be set 
aside, and there must be 

Judgment for the defendant 



150 



SALES, 



CUSACK et al. v. ROBINSON. 

(1 Best & S. 299.) 

Queen's Bench,- Trinity Term. May 25, ISCl. 

Declaration for goods sold and delivered, 
and goods bargained and sold. Plea, never 
indebted. At the trial before Blacliburn, J., 
at the Liverpool winter assizes in ISUO, it 
appeared that the defendant, who was a Lon- 
don merchant, on the 24th October, ISGO, at 
Liverpool called on the plaintiffs, who are 
importers of Canadian produce, and said he 
wanted to buy from 150 to 200 firkins of Ca- 
nadian butter. He then went with one of the 
plaintiffs to their cellar, where he was shown 
a lot of 15G firkins of butter, "ex Bohemian," 
belonging to the plaintiffs, which he then had 
the opportunity of inspecting, and in fact he 
did open and inspect six of the firkins in that 
lot. After that examination, they went to 
another cellar to see other butter, which 
however did not suit the defendant. At a 
later period of the same day the plaintiffs 
and the defendant made a verbal agreement 
by which the defendant agreed to buy that 
specific lot of 150 firkins at 77s. per cwt. 
When the price had been agreed on, the de- 
fendant took a card, on which his name and 
address in London were written, "Kdnnmd 
Robinson, 1 Wellington Street, London 
Bridge, London," and wrote on it "15G firkius 
butter to be dehvercd at Fenning's Wharf, 
Tooley Street" He gave this to the plain- 
tiffs, and at the same time said that his 
agents Messrs. Clibboru, at Liverpool, would 
give directions how the goods were to be for- 
warded to Fenning's Wliarf. The plaintiffs 
by Clibbom's directions delivered the butter 
to Pickford's cai'ts to be forwarded to the 
defendant at Fenning's Wharf. The plain- 
. tiffs sent an invoice dated the 25lh October, 
ISOO, to the address on the defendant's card. 
They received in answer a letter purporting 
to come from a clerk in the defendant's of- 
fice, acknowledging the receipt of the Invoice, 
and stating (hat on the defendant's return 
he would no doubt attend to it. There was 
no evidence that the writer of this letter had 
any authority to sign a memorandum of a 
contract. On the 27th October llie plaintiffs 
In Liverpool received a telegram from the de- 
fendant in London, In effect asserthig tliiit 
the butters had been sold by the plaintiffs 
subject to a wairanty that was equal to a 
sample, but tliat tliey were not eipial to sam- 
ple, and therefore would be returned. T)ie 
Iilaliitlffs replii'd by telegram that there was 
no such warranty, and I hey must bo kcjit. 
A clerk at Fennlngs" Wharf proved that 
Messrs. Fennlnp stored goods for their cub- 
touiers, and hail a butter wareliouse; that 
the defendant had used the wari^liotise for 
fifteen ycari, and was In the habit of keeping 
hlH buttora there till he sold them. On the 
2Cth October I'Ickford & Co. had dcllvorcil 
a part of the 1."<! Ilrklnn In question nt the 
warehouse, and delivered the residue on I lie 
tnornlng of the 27tb October. The wltuews 



could not say whether any one came to in- 
spect them or not. but he proved that the.v 
were delivered up by Penning to Pickford iV 
Co. under a delivery order from the defend- 
ant dated 27th October. The defendant's 
counsel admitted that it must be taken tluit 
the sale was not subject to any warranty; 
but objected that the price of the goods ex- 
ceeded £10. and that there was nothing prov- 
ed to satisfy the requisitions of the statute of 
frauds. The verdict was entered for the 
plaintiffs for £420 10s. Id., with leave to the 
defendant to move to enter a nonsuit, If there 
was no evidence proper to be left to the jury 
either of a memorandum of the contract or of 
an acceptance and actual receipt of the goods. 

In Hilary term, 1S61, Edward James ob- 
tained a rule nisi. Mellish and Quain shew- 
ed cause. Milward, in support of the rule. 

BLACKBURN, J. (After fully slating the 
facts his lordship proceeded.) It was not 
contended that there was any sufficient mem- 
orandum in writing in the present case; but 
it was contended that there was sufflciout 
evidence that tlie defendant had accepted the 
goods sold and actually received the same; 
and on consideration we are of that opinion. 

The words of the statute are express that 
there must be an acceptance of the goods or 
part of them, as well as an actual receipt; 
and the authorities are veiT numerous to 
sliow that both these requisites must exist, 
or else the statute is not satisfied. In the 
recent case of Nichol.son v. Bower, 1 E. & 
E. 172, which was cited for the defendant, 
141 quarters of wheat were sent by a rail- 
way, addressed to the vendees. They aniv- 
ed at their destination, and were there ware- 
housed by the railway company under cir- 
cumstances that might have been held to put 
an end to the unpaid vendor's rights. But 
the contract was not originally a sale of spe- 
cific wheat, and the vendees had never agreed 
to take tliose particular quarters of wheat: 
on the contrary it was shewn to bo usual, 
before accci)ling wheat thus warehoused, to 
compare a sample of the wheat with tlio 
sample by which It was sold; and it appeared 
that tlio vendees, knowing that they were in 
embarrassed circumstances, purposely ab- 
Rtalnod from accoi)ting tlie goods; and eadi 
of tlie judges mentions that fact as the 
ground of I heir decision. In Meredith v. 
Meigh. 2 10. & B. Ml, the goods, wlilch were 
not si)ecilicd In the original contract, had 
been selected by the vendor and put on board 
ship by the directions of the vendee, so that 
they wore In the hands of a ciirrler (o con- 
vey them from tlie vendor to the vendee. It 
was tliere held. In conformity wllli Hanson 
V. Arinllage, 5 B. & Aid. .557, that the car- 
rier, though named by the vendee, had no 
authority to acceiit the goods. And In this 
we qnlfo agree; for though the selection of 

the g Is by the vendor, and putting them 

lu tianslt, would but for the statute ha\o 



RIGHTS OF SELLER AGAINST GOODS— VENDOR'S LIEN. 



157 



been a sufficient flclivery to vest the proper- 
ty in the vendee, it could not be said that the 
selection by the vendor, or the receipt by the 
carrier, was an acceptance of those particular 
goods by the vendee. 

In Baldey v. Parker, 2 B. & C. 37, which 
was mucli relied on by Mr. Milward in argu- 
ing in support of this rule, the ground of the 
decision was that pointed out by Holroyd, J., 
who says (page 44): "Upon a sale of specific 
goods for a specific price, by parting with 
the possession the seller parts with his lien. 
The statute contemplates such a parting with 
the possession; and therefore as long as the 
seller presei-ves his control over the goods 
so as to retain his lien, he prevents the ven- 
dee from accepting and receiving them as his 
own within the meaning of the statute." 
The principle here laid down is, that there 
cannot be an actual receipt by the vendee so 
long as the goods continue in the possession 
of the seller as unpaid vendor so as to pre- 
serve his lien; and it has been repeatedly 
recognized. But though the goods remain in 
the personal possession of the vendor, yet if 
it is agreed between the vendor and the ven- 
dee that the possession shall thenceforth be 
Ivept, not as vendor, but as bailee for the pur- 
chaser, the right of lien is gone, and then 
there is a sufHcient receipt to satisfy the stat- 
ute. Marvin v. Wallis, 6 E. & B. 726; Beau- 
mont V. Brengeri, 5 C. B. 301. In both of 
these cases the specific chattel sold was as- 
certained, and there appear to have been acts 
indicating acceptance subsequent to the f jree- 
ment which changed the nature of the posses- 
sion. 

In the present case there was ample evi- 
dence that the goods when placed in Fen- 
ning's Wharf were put under the control of 
the defendant to await his further directions, 
so as to put an end to any right of the plain- 
tiffs as unpaid vendors, as much as the 
change in the nature of the possession did 
in the cases cited. There was also sufHcient 
evidence that the defendant had at Liverpool 
selected these specific 156 firkins of butter 
as those which he then agreed to take as his 
property as the goods sold, and that he di- 
rected those specific firlcins to be sent to 
Ijondon. This was certainly evidence of an 
acceptance; and the only remaining question 
is, whetlier it is necessary that the acceptance 
should follow or be contemporaneous with 
the receipt, or whether an acceptance before 
the receipt is not sufHcient. In Saunders v. 
Topp. 4 Exch. 390, which is the case in which 
the facts approach nearest to the present 
case, the defendant had, according to the find- 



ing of the jury, agreed to buy from the plain- 
tiff forty-five couple of sheep, which the de- 
fendant, tlie purchaser, had himself selected, 
and the plaintiff had by his directions put 
them in the defendant's field. Had the case 
stopped there, it would have been identical 
with the present. But there was in addition 
some evidence that the defendant, after see- 
ing them in the field, counted them, and said 
it was all right; and as this was some evi- 
dence of an acceptance after the receipt, it be- 
came unnecessary to decide whether the ac- 
ceptance under the statute must follow the de- 
livery. Parke, B., from the report of his ob- 
servations during the argument, seems to 
have attached much importance to the selec- 
tion of pai'ticular sheep by the defendant: 
but in his judgment he abstains from decid- 
ing on that ground, though certainly not ex- 
pressing any opinion that the acceptance 
must be subsequent to the delivery. Tlie 
other three barons— Alderson, Eolfe, and Piatt 
—express an inclination of opinion that it is 
necessary under the statute that the accept- 
ance should be subsequent to or contempo- 
raneous with the receipt; but they expressly 
abstain from deciding on that ground. In the 
elaborate judgment of Lord Campbell in Mor- 
ton V. Tibbett, 15 Q. B. 428, in which the 
nature of an acceptance and actual receipt 
sufHcient to satisfy the statute is fully ex- 
pounded, he says (page 434): "The accept- 
ance is to be something which is to precede 
or at any rate to be contemporaneous witli 
the actual receipt of the goods, and is not to 
be a subsequent act after the goods have 
been actually received, weighed, measured, or 
examined. The intention of the legislature 
seems to nave been that the contract should 
not be good unless partially executed; and 
it is partially executed if, after the vendee 
has finally agreed on the specific articles 
which he is to take under the contract, the 
vendor by the vendee's directions parts witli 
the possession, and puts them under the con- 
trol of the vendee, so as to put a complete 
end to all the rights of the unpaid vendor as 
such. We think therefore that there is noth- 
ing in the nature of the enactment to imply 
an intention, which the legislature has cer- 
tainly not in terms expressed, that an accept- 
ance prior to the receipt will not suflSce. 
There is no decision putting this construction 
on the statute, and we do not think we ought 
so to construe it. 

We are therefore of opinion that there was 
evidence in this case to satisfy the statute 
and that the rule must be discharged. 

Rule discharged. 



15S 



SALES. 



BABCOCK V. BONNELIi. 

(80 X. Y. 244.) 

Court of Appeals of New York. Jan. Term, 
ISSO. 

Action by the administratrix of Babcock 
against Bonnell for an accounting for the 
proceeds of a policy of insurance taken out 
on the life of Babcock, and delivered to de- 
fendant as collateral security for two prom- 
issory notes of Babcock & Co. for $4,6TS.4S. 
Bonnell afterwards received from one 
Wheelright $925 in full satisfaction of the 
notes, which were delivered to Babcock & Co. 
and destroyed. 

Wm. W. Niles, for appellant. Julien T. 
Davis, for respondent. 

CHURCH. C. J. The finding of the trial 
judge that the policy was taken out and de- 
livered to the defendant as collateral securi- 
ty for the payment of the indebtedness of 
Babcock & Co. to him was warranted by the 
evidence. Xo other conclusion could be ar- 
rived at, and the evidence is substantially 
undisputed. 

Some years afterward Mr. Babcock ex- 
pressed a desire not to be regarded as hav- 
ing an Interest, and stated that the entire 
interest was in the defendant; but I do not 
think that this expression, under the circum- 
stances, would have the effect of a release, 
or create an estoppel. There is no dispute 
that at the time the policy was taken out, 
there was an indebtedness in favor of the 
defendant against Babcock & Co., evidenced 
by two notes, amounting to $4,678.48. The 
policy was isstied in Februaiy, 1870, and it 
is claimed and found that in April, 1870, 
these notes were compromised and settled, 
and that the defendant received from one 
Wheolright, on behalf of Babcock & Co., 
.$025 in money, in full satisfaction and dis- 
charge of said indebtedness, and delivered 
and surrendered said notes to him, and that 
they were afterward delivered up to Bab- 
cock & Co., who destroyed and canceled 
them. Wheelright testified that he i)urchased 
the notes of the defendant, and paid his 
own money, and delivered them to lialicock 
& Co. upon being repaid that amount and 
his expenses. In either view we think the 
debt was discharged. It was an executed 
accord. Nothing remained executory, and It 
I'perated as a full satisfaction. A mere 
promise to accept less than the full amotmt 
of a debt although the sum prnniised has 
been paid ha.s been held not H\illlricnt; but 
when the sectn-lty lias been surrendered, or 
some act done of a like nature, there Is no 
reason In law or morals, why the party 
should not be boiuid. Kronicr v. Helm, 75 
N. Y. ri74. 

It may be that the dofendant Intended to 
hold tin- policy of liiHurance to Indcmiiiry 
hini ffir the dellciciicy, but there was no 
Qgroement to that elTect, and the defondanl's 



letters indicate that he had regarded the 
debt fully released and canceled. The de- 
fendant claims also to hold the policy as se- 
curity for the balance of an additional in- 
debtedness of $1,226.44 and interest, after 
applying the proceeds of a cargo of coal, the 
finding in respect to which is here inserted. 
"Fourth. On the 15th day of November, 1SG9. 
the defendant sold a cargo of coal to said 
Charles A. Babcock & Co., and took a note 
in payment therefor of $1,226.44, due March 
15, 1S70; the said last-mentioned cargo of 
coal was shipped to said Charles A. Bab- 
cocl; & Co. by the schooner Hepzibah, on or 
.nbout the 21st day of February. 1870, the 
defendant through his agent, Edward Gul- 
lager, stopped the said last-mentioned cargo 
of coal in transitu, took possession thereof 
and disaffirmed the contract of sale therefor, 
and on the 4th day of May. 1870, sold the 
said last-mentioned cargo of coal to one E. S. 
Farrar." If this finding can be sustained as 
a finding of fact, it disposes of any claim for 
the debt. If the disaffirmance of the con- 
tract of sale of the coal depends as matter 
of law upon the stoppage of the coal in 
transitu, then a more difticult and doubtful 
question is presented. Kvery intendment is 
in favor of the findings of facts, and findings 
may be implied if warranted by the evidence 
to sustain a judgment. The evidence as to 
the stoppage of the coal, as to the possession 
of the defendant, and the sale thereof by 
him does not present the facts as clearly as 
would be dcsn-able upon this question. If 
the defendant took possession of the coal in 
the exercise of the right of stoppage in trans- 
itu, and sold the same without notice to 
Babcock & Co., and without their consent, 
and especially before the debt was due, an 
inference of an intention to disaffirm the 
contract of sale might be drawn, because 
upon the theory that this riglit is to enforce 
.a lien, as clnime<l by the defendant, he must 
hold the property until the expiration of the 
credit, and be able to deliver it upon pay- 
ment of the price, and the vendee has the 
right to pay the price and take the property. 
According to that theory the credit Is not 
abrogated, nor the sale, but the vendor Is 
permitted to re-take the possession of the 
pnipcrty, and hold It as security until the 
price Is paid. If not paid at the time stipu- 
lated the vendor. In analogy to other cn.ses 
of lien, may sell the property upon giving 
notice. 

Tlie general rule upon the theory of n lion 
must be that the vendor having exercised 
the right of stoppage In trausllu. la restored 
to his iHisltlon before he parted with the pos- 
session of the properly. The properly is 
vested In the vendee, and the vendor holds 
possession as security for the payment of 
the purchase-price. If therefore the defend- 
ant sold the coal without notice or consent, 
or If witli coiiHciit of the vendees wllli the 
understanding that the sale was to be 
deemed rescinded the finding wotilil bo jus- 



IIIGUTS OF SELLEU AGAINST GOODS— STOPPAGE IN TRANSITU. 



159 



I i lied, aud the defendant would have no 
claim upon this note. 

The coal was sold to one Parrar, and a bill 
of sale thereof made by the defendant, and 
he received the pui'chasc-mouey. The coal 
was sold and the bill of sale and payment 
were not made until April, after the note 
bucame due, aud there is some conflict in 
the evidence whether it was made witli the 
linowledge or consent of Babcock & Co., or 
not. 

As to the legal question, although the 
right of stoppage in transitu has been recog- 
nized in England for nearly two hundred 
years, there is great confusion in the books 
as to the origin of the right, and the princi- 
)iles upon which it is founded. As late as 
1S41 Lord Abinger said, that "although the 
question of Stoppage in transitu had been as 
frequently raised as any other mercantile 
question within the last hundred years, it 
must be owned that the principle on which 
it depends has never been either settled or 
slated in a satisfactory manner. 

"In courts of equity it has been a received 
opinion that it was founded on some prin- 
ciple of common law. In courts of law it 
is just as much the practice to call it a 
principle of equity which the common law 
has adopted." 

Mr. Parsons, in his work on Admii-alty, 
says, there are three ways, in either of 
which it might be supposed that the law 
of stoppage entered into the law of Eng- 
land. One that it is based upon the civil 
law by which, in case of a sale, the prop- 
erty does not pass to the buyer until he 
has possession of the goods. It would fol- 
low that the seller would continue the own- 
er until they reach the buyer, and that by 
the insolvency of the latter the goods would 
remain the property of the former. By the 
common law a sale does of itself pass the 
property to the buyer, without delivery. 
Another way is by implying a right of re- 
scinding the contract of sale in case of in- 
solvency, and that the act of stoppage was 
an exercise of that riglit, and a third way 
is by Implying constructive possession in 
the seller for the purpose of a lien, to be 
enforced by the act of stoppage, or, in oth- 
er words, that this right is an enlargement 
of the common-law right of lien. Pars. 
Adm. 479. 

The rule seems not to have been settled in 
1S4J. Parke, B., said: "What the effect of 
stoppage in ti'ansitu is, whether entirely to 
rescind the contract, or only to replace the 
vendor in the same position as if he had 
not parted with the possession, and entitle 
him to hold the goods until the price be 
paid down, is a point not yet fully decided, 
and there are difficulties attending each con- 
struction." 

Mr. Bell, in his Commentaries on the 
Law of Scotland, favors the doctrine of 
rescission. He says: "Although there are 
many difficulties either way, it appears, on 



the whole, most consistent with the great 
lines of this doctrine of stoppage in trans- 
itu, that the seller's security over the goods 
sold, though perhaps in a large sense of 
the nature of a lien, is given by equity 
originally on the condition that the seller 
shall take back the goods, as if the con- 
tract were ab initio recalled." 

There are some other authorities favor- 
ing the same view, and there are others 
that favor the theory of a lien. Feise v. 
Wray, 3 East, 03; Ex parte Gwynne, 12 
Ves. 379; Lickbarrow v. Mason, 6 East, 21, 
note. 

Mr. Parsons says that the earlier Eng- 
lish cases sustain the doctrine of a lien, 
and intimates that later authorities changed 
the ground to that of rescission, but that 
the latest returned to the original doctrine. 
Pars. Adm. 481. Whatever uncertainty 
there may be as to the rule in England, 
the decisions In this country are quite pre- 
ponderating in favor of the theory of a 
lien. Rowley v. Eigelow, 12 Pick. 307; Stan- 
ton V. Eager, 16 Pick. 467-475; Arnold v. 
Delano, 4 Gush. 33, 39; Newhall v. Vargas, 

I 13 Ble. 93, 15 Me. 314; and cases cited; 

I Rogers v. Thomas, 20 Conn. 53; Jordan v. 

! .Tames, 5 Ohio, SS-98; Harris v. Pratt, 17 
N. Y. 263. The elementary writers favor 
the same view. 2 Kent, Comm. 541; Pars. 
Adm. 483: Pars. Cent. 598. The question 
has never been, that I am aware, definite- 
ly decided in this state. As an original 
question the doctrine of rescission com- 
mends itself to my judgment as being more 
simple, and in most cases, more just to 
both parties than the notion that the act 
of stoppage is the exercise of a right of 
lien, but in deference to the prevailing cur- 
rent of authority, I should hesitate in at- 
tempting to oppose it by any opinion of 
my own, and for that reason I do not deem 
it necessary to state the grounds which 
influence my judgment. 

It is found as a fact that the policy was 
delivered to the defendant as collateral se- 
curity for the payment of the first two 
notes referred to only, "and that the de- 
fendant never acquired or had any inter- 
est in said policy or in the moneys to ac- 
crue or become payable thereon, except as 
a creditor of the said firm, and to the ex- 
tent of his claim upon the aforesaid two 
notes against the said firm." The evidence 
justified his finding. The letter of the de- 
fendant of March 1, 1876, shows that he 
did not then suppose that he had any le- 
gal indebtedness against Babcock & Co. 
At the time the policy was issued the car- 
go of coal for which the last note was 
given was in possession of the defendant 
as he claimed, and had not been disposed 
of, so that the balance, even if Babcock & 
Co. were liable for it, could not then be 
known, and in March after, in a letter to 
the defendant, introducing Mr. Wheelright, 
Babcock & Co. say: "We will avail our- 



IGO 



SALES. 



selves of the opportunity to have him ar- 
range for the settlement of your claim 
against us, leaving in abeyance the cargo 
of Hepzibah, and the note given in settle- 
ment of the same." 

The testimony of the Insurance agent is 
to the effect that the policy was delivered 
to secure a fixed indebtedness, which could 



only refer to the first two notes. 'We are 
of opinion therefore that the defendant has 
no lien upon this money to secure the bal- 
ance of the note given for that cargo of 
coal, even if Babcock & Co. are liable for it. 

It follows that the judgment must be af- 
firmed. 

All concur, except EARL, J., dissenting. 



RIGHTS or SELLER AGAINST GOODS— STOPPAGE IN TRANSITU. 



161 



KIXCMAN et al. v. DENISON et al. 

(48 N. W. 26, 84 Mich. 608.) 

Supreme Court of Michigan. Feb. 27, 1891. 

Error to circuit court, Keut county; Wil- 
liam E. Grove, Judge. 

Replevin by Kingman & Co. against Wil- 
liam C. Denison and the McCormick Hai'- 
vesting Machine Company. There v^as a 
judgment in defendants' favor, and plain- 
tiffs bring error. 

Taggart & Denison. for appellants. Sweet 
& Perkins, for apisellees. 

LONG, J. On July 8, 1889, defendant Den- 
ison wrote the plaintiffs at Peoria, 111., or- 
dering 5,000 pounds of twine. No dealings 
had ever been had between the parties prior 
to that time. The plaintiffs received the let- 
ter next day, and at once wrote Denison: 
"We have entered your order, and twine 
will go forward to-morrow." On July 11th 
the twine was shipped to W. C. Denison, 
Grand Rapids, Mich., plaintiffs taking ship- 
ping bill from the railroad company there, 
and on the same day sent it to Denison, 
with statement of account for value of the 
twine. The twine was received at Grand 
Rapids by the Grand Rapids & Indiana Rail- 
road Company, July 17th, and on the ISth 
they turned it over to a teamster, who deliv- 
ered it at the store which was occupied by 
Denison at the time the order was made. 
It appears that on July 9th the Grand Rap- 
ids Savings Bank caused an attachment to 
be levied upon Denison"s property. On that 
evening Denison gave the bank a chattel 
mortgage on all the goods in the store and 
at a warehouse there, and a store situate 
at another place outside of Grand Rapids. 
July 10th, 11th, and 12th he gave mortgages 
on the same property to several other cred- 
itors, two of them being given to the defend- 
ant the McCormick Harvesting Machine 
Company. The goods mortgaged were held 
in the store by the agents of the bank until 
they were sold under one of the mortgages, 
which was about July ISth, at which time 
the defendant the McCormick Harvesting 
Machine Comiiany bid the goods in, and con- 
tinued to occupy the store, putting Mr. Deni- 
son in as its agent. The McCormick Har- 
vesting Machine Company mortgage con- 
tained a clause, after a description of the 
property mortgaged, as follows: "And all 
additions to and substitutes for any and all 
the above-described property." On Septem- 
ber 7th plaintiffs, who had no notice or 
knowledge of the changed condition of Mr. 
Denison's affairs, drew on him at sight for 
the amount of the bill. This draft was not 
paid, and on September 14th plaintiffs wrote 
him for prompt remittance, which was not 
made. On September 19, 1889, plaintiffs 
brought replevin against the defendants for 
the twine, finding about one-half of it; the 
balance having been sold out of the store by 
citii'.rKiiS. ruop. — 11 



the JlcCormick Harvesting Machine Com- 
pany. On the trial of the cause the defend- 
ants waived I'cturn of tlu! property, and had 
verdict and judgment against the plaintiffs 
for $351.01, the value of the twine taken, 
and costs. Plaintiffs bring error. 

The plaintiffs asked the court to Instruct 
the jury that plaintiffs were entitled to a 
verdict; and in the ninth request aske<l an 
instruction that "if Mr. Deui.son did not in 
fact receive the twine at liis store, but was 
not there when it was delivered, and never 
received and accepted it for his use in any 
way, except that, finding it in the store, he 
allowed the mortgagees to assume control 
of it, plaintiffs could retake it as against 
him." And in the fourteenth request it was 
asked that the jury be instructed that the 
McCormick Company, as mortgagee, is in 
no better position than Mr. Denison. Its 
mortgage does not cover this twine, nor is 
it a bona fide purchaser. Several requests 
were also asked for instructions to the jury 
relating to the insolvency of Mr. Denison at 
the time of the purchase, and his intent not 
to pay for the twine at the time of Its pur- 
chase, or at the time when it was received 
at the store, on the 18th of July. These 
last-named requests we do not deem it nec- 
essary to set out here for an understanding 
of the points involved. The requests set 
out were refused by the trial court, and up- 
on such ruling the plaintiff' assigns error. 
The court, in its charge to the jury, stated: 
"Plaintiff claims the right to the possession 
of these goods at the time this suit was 
commenced — First, Because as counsel 
claiiiis, the goods were ordered, were pur- 
chased, by Mr. Denison at a time when he 
was insolvent, and knew that he was insol- 
vent, and h.ad no intention, or at least no 
reasonable expectation, of paying for them 
according to the terms of the contract; and 
the plaintiff's counsel also claims the right 
of stoppage in transit. All I need to say in 
regard to the latter claim is that I think the 
right of stoppage in transit, under the facts 
of this case as shown by the evidence, has 
no application whatever; there is no such 
right existing." This part of the charge re- 
lating to the right of stoiipage in transit is 
assigned as error. The court was in error 
in refusing these rdquests to charge and in 
the charge as given. It is not seriously 
contended here but that, under the evidence 
given on the trial, the defendant Denison 
was insolvent at the time the goods were 
ordered. At least this was a question of 
fact which should have been submitted to 
the jury; aud, if so found, the question of 
the right of stoppage in transit was an im- 
portant question in the case. The right of 
stoijpage In transit is a right possessed by 
the seller to reassume the possession of 
goods not paid for while on their way to the 
vendee, in case the vendee becomes insol- 
vent before he has acquired actual posses- 
sion of them. It is a privilege allowed to 



IGJ 



SALES. 



the seller for the particular purpose of pro- 
tecting him from the insolvency of the con- 
signee. The right is one highly favored in 
the law, being based upon the plain reason 
of justice and equity that one man's prop- 
erty should not be applied to the payment 
of another man's debts. Gibson v. Carruth- 
ers. S ilees. & W. 337. But it is properly 
exercised only upon goods which are in 
passage and are in the hands of some inter- 
mediate ijerson between the vendor and 
vendee in jDrocess, and for the puriiose of 
delivery, and this right may be exercised 
whether the insolvency exists at the time of 
the sale or occurs at any time before actual 
delivery of the goods, without the knowl- 
edge of the consignor. O'Brien v. Norris, 16 
Md. 122; Reynolds v. Railway Co., 43 N. H. 
5S0; Blum v. Marks. 21 La. Ann. 2CS; Bene- 
dict V. Scaettle, 12 Ohio St. 515. This right 
of stoppage in transit will not be defeated 
by an apparent sale, fraudulently made, 
without consideration, for the purpose of 
defeating the right. There must lie a pur- 
chase for value without fraud, to have this 
effect. Harris v. Pratt, 17 N. Y. 249. In 
the present case it appears that the goods 
arrived in Grand Rapids July 17th, and were 
taken to the store on the 18th. Mr. Deni- 
son was not in the store at the time they 
were taken in. Jlr. Talford was in posses- 
sion of all the goods and of the store at this 
time for all the mortgagees, and after the 
sale under the mortgage the JlcCormick 
Company took possession, and was in pos- 
session at the time this replevin suit was 
commenced. The testimony tends to show 
that at tlie time demand was miide upon 
I lie McCormick Compnny and Mr. Denison 
fur tlie twine Mr. Denison stated that he 
thought the plaintiff, haviug heard of his 
financial affairs, would not ship the twine, 
and that lie did not know it had been ship- 
ped until it was in the store; and he was 
very sorry It had come, under the clreum- 
stajDces. The McCormick Company claimed 



that by the terms of their mortgage they 
were entitled to hold the twine. The court 
was in error in not submitting to the jury 
the question whether the goods had come 
actually to the possession of Mr. Denison. 
The circumstances tend strongly to show 
that he never had actual possession of them, 
and never claimed them as owner. He had 
made the order, and was notified that they 
would be shipped; but from that time for- 
ward it is evident that he made no claim 
to them. The McCormick Company claim- 
ed that they passed to it under the terms of 
its mortgage". It however, stood in no bet- 
ter position than Denison. If the goods 
never actually came into the possession of 
Denison as owner, the mortgage lien would 
not attach, even under the clause in the 
mortgage covering after-acquired property. 
It does not stand in the position of a bona 
fide purchaser of the property. The right 
of stoppage could not be divested by a pur- 
chase of the goods under the mortgage sale. 
The transit had not ended unless there was 
actual delivery to Mr. Denison. These were 
questions of fact for the jury, which the 
court refused to submit. If the jury had 
found that Denison was insolvent at the 
time the order was made, or became insol- 
vent at any time before the claimed deliv- 
ery of the goods, and that the goods wore 
never actually delivered to the iwssession 
of Mr. Denison. then the vendors' rights 
would have been paramount to any right 
which the McCormick Company could have 
acquired at the mortgage sale. Underbill v. 
Booming Co., 40 Mich. OGO; Lentz v. Rail- 
way Co., 53 Mich. 444, 10 N. "W. 13S; "White 
V. Mitchell, 38 Mich. 31)0; James v. Griffin, 
2 Mees. & W. 023. In the view we have 
taken of tlie case, we think the other ques- 
tions raised are unimportant, and we will 
not pass upon them. Tlie judgment of the 
court below must be reversed, with costs, 
and a new trial ordered. The other jus- 
tices concurred. 



lUGUT.S OF .SKLLEH AGAINST GOODS— STOPPAGE IN TRANSITU. 



108 



TUFTS V. SYLVESTER. 

(9 Atl. 35T, 79 Me. 213.) 

Supreme Judicial Court of Maine. March 1, 
1SS7. 

On report from supreme judicial court, 
Franklin eounty. 

Trover by the vendor of merchandise 
against the messenger of the insolvent ven- 
dee. The opinion states the facts. 

S. Clifford Belcher, for plaintiff. H. L. 
Whiteomb, for defendant. 

PETERS, C. J. The plaintiff sold a bill of 
soods to be shipped at Boston to the buyer 
at Farmingtou, in this state. The buyer, 
becoming insolvent after the purchase, coun- 
termanded the order, but not in season to 
stop the goods. Before tlie goods came, he 
liad gone into insolvency, and a messenger 
liad talien possession of his property. An 
express company bringing the goods tendered 
them to the buyer, who refused to receive 
them, but the messenger accepted the goods 
from the carrier, paying his charges thereon. 
After this, but before an assignee was ap- 
pointed, the seller made a demand upon both 
the carrier and the messenger, attempting 
til reclaim his goods. The question, upon 
these facts, is whether the goods were sea- 
sonably stopped in transitu to preserve the 
plaintiff's lien thereon. We think they were. 
The right of stoppage in transitu is favored 
by the law. It is clear that the goods did not 
go into the buyer's possession. He refused 
to receive them. He had a moral and legal 
right to do so. Such an act is commended 
by jurists and judges. He in this way makes 
reparation to a confiding vendor. "He may 
refuse to take possession," says Mr. Benja- 
min, "and thus leave unimpaired the right 
of stoppage in transitu, unless the vendor be 
anticipated in getting possession by the as- 
signees of the buyer." Benj. Sales, § 858. 
In Grout v. Hill, 4 Gray, 3G1, Shaw, C. J., 
says: "Where a purchaser of goods on credit 
finds that he shall not be able to pay for 



them, and gives notice thereof to the vendor, 
and leaves the goods In possession of any 
person, when they arrive, for the use of the 
vendor, and the vendor on sucli notice ex- 
pressly or tacitly assents to it, it is a good 
stoppage in transitu, although the bankrupt- 
cy of the vendee intervene." See same case 
at page 3G9; 1 Pars. Cont. *590, and cases. 

The decision of the case, then, turns upon 
the qtiestion whether the messenger could ac- 
cept the goods, and terminate the lieu of the 
vendor. We do not find any authority for it. 
A bankruptcy messenger acts in a passive 
capacity; is intntsted with no discretionary 
powers; acts under mandate of court, or does 
certain things particularly prescribed by the 
law which creates the oflice; is mostly a 
keeper or defender of property, — a cus- 
todian until an assignee comes; and he can 
neither add to nor take from the banl<rupt's 
estate. He is to take possession of the "es- 
tate" of the insohent. These goods had not 
become a part of the estate. He was not at 
liberty to affirm or disaffirm any act of the 
insolvent. The law imposes on him no such 
responsibility. Chancellor Kent says that 
the transit is not ended while the goods are 
in the hands of a carrier or middle-man. 
A messenger has no greater authority, ex 
ottlcio, than a middle-man, excepting as the 
insolvent law expressly prescribes. In Hil- 
liard's Bankruptcy (page 101) the office of 
a messenger is likened to that of a sheriff 
under a writ. He becomes merely the recip- 
ient of property. The title of the assignee 
when appointed, dates back of the appoint- 
inent of a messenger. Until appointment of 
assignee, the bankrupt himself is a proper 
person to tender money for the redemption 
of lands sold for taxes. Hampton v. Rouse, 
22 Wall. 203. See Stevens v. Palmer, 12 
Mete. 464. The case cited by the plaintiff. 
Sutro V. Hoile, 2 Neb. 186, supports this con- 
tention. 

Defendant defaulted. 

WALTON, VIRGIN, LIBBEY, EMERY, 
and HASKELL, JJ., concurred. 



164 



CHATTEL MOUTGAGES. 



BEEMAN V. LAWTON. 

(37 Me. 543.) 

Supreme Judicial Court of Maine. 1854. 

On exceptions from nisi prius; Rice, Judge. 

Trover for tlie conversion of a piano forte. 
Botli parties claimed under one Bartlett who 
mortgaged it to defendant, in February, 
1S51, which mortgage was recorded, and 
some months .ifter (November 4, 1851,) gave 
a bill of sale of it to plaintiff, but he could 
prove no delivery or possession. Xhe plain- 
tiff introduced evidence tending to show that 
the mortgage was made with the design of 
defeating the creditors of Bartlett. The de- 
fendant proved by his partner in business 
faftcr a release by him of all his interest in 
the piano) that in Jlay, 1851, Bartlett wish- 
ed him to become surety for him on a poor 
debtor's bond. He declined. Bartlett then 
said to defendant: "You have that piano. 
If you will sign the bond, and I don't hold 
you harmless, you take the piano, and sell 
it or keep it, as you see fit." The defend- 
ant and his partner signed the bond. In 
the succeeding fall the defend.iut took the 
piano into his possession. In the spring of 
18.53 the witness paid the execution upon 
which the bond was given out of the part- 
uershij) funds, amounting to $140. The 
judge instructed the jury that, if Bartlett 
authorized the defendant to sell or keep the 
piano in consideration that his partner would 
sign the bond, then the release of said wit- 
ness to defendant discharged the dofcmlant's 
claim. Tlie verdict was for plaintiff, and 
defendant excepted. 
I'aine & CUiy, for defendant. Danfurlh & 

\Yoods, for plaintiff. 

APPLETON, J. It appears that on Feb- 
ruary 27, 1851, one Bartlett, from whom both 
parties derive title, executed a mortgage of 
the piano in dispute to the del'enilanl, who 
in the fall following took the same Into his 
possession. The plaintiff's bill of sale was 
dated November 4, 1851. As between these 
opposing titles, that of the del'endant was 
I>rior, and possession was acquired inider it, 
Init it was resisted on the ground th;it it was 
fraudulent. No excepllons having been tak- 
en to the Instructions on this branch of the 
case, they must be deemed correct. Indeed, 
It was conceiled that the Instructions given 
did not apply to the written mortgage, so 
that the (luestjon to be considered Is wheth- 
er they are erroneous In reference to the 
Hiiliject-mattor to which they were specially 
jippli( able. The verdli't of the Jury, which 
WHS for the pliilnllfr. temls to establish the 
fact that the wrillen iTiorlgage was fraudu- 
lent or Invalid for simie other cause, ns, nn- 
le88 such had been the rase, the defendant, 
being In piiHHesslon under n title prior to the 
plaint Iff. iniiHt neeessailly have been entitled 
to a verdict. 



It appears that in May, 1851. Bartlett call- 
ed on S. W. Lawton, a witness in the case, 
with his brother, the defendant. Bartlett 
wished the witness to execute as surety for 
him a poor debtor's bond, which he declined. 
He then turned to the defendant, and said: 
"Ton have the piano, and if yo\i will sign the 
bond, and I don't hold .you harmless, you 
take the piano, and sell it or keep it, as you 
see fit." The witness signed the bond. 
Last spring the witness paid the execution 
uiwn which the bond was taken, out of the 
joint funds of the defendant and himself, 
they being partners. The amount paid was 
.'!;140. It is in reference to this transaction 
that the instructions complained of wore 
given. 

It is to be observed that at this time the 
defendant was not in possession, so that the 
conversation related to a piano of which he 
neither had possession nor (the mortgage be- 
ing for some cause void) the right to posses- 
sion. The del'endant claimed that this trans- 
action constituted a mortgage, but such was 
not its character. By Kev. St. c. 125, § 32, 
no mortgage "shall bo valid against any 
other persons than the parties thereto, unless 
possession of the mortgaged property be de- 
livered to and retained by the mortgagee; 
or unless the mortgage has been or shall be 
recorded by the clerk of tlio town where the 
mortgager resides." A delivery of personal 
property for security is not a transfer on 
condition, and does not constitute a mort- 
gage thereof, but a pledge merely. Eastman 
V. Avery, 23 Me. 248. So that, even if the 
piano had been delivered for the purposes of 
security, the defendant could not have held 
the property as mortgagee. Much more will 
it not constitute a mortgage when the prop- 
erty is neither present nor delivered. 

The defendant shows no right to retain the 
property as a pawn or pledge. To consti- 
tute a pawn or pledge, there must be a de- 
livery and retention of the possession of the 
thing pawned. If the pawnee give up the 
l)ossession to the pawner, his rights are gone. 
The element of possession fallitig, there can 
be no pawn nor pledge. Story, Ballm. § 3(WI; 
Haven v. Law, 2 N. H. Ifi; Bonsey v. Ainee. 
8 Pick. 23(5. II can at most be viewed only 
aa a mere executory agreement, conferring 
no rights of possession or property over the 
Uilng to which II related. 

The witness I>awlon, was neither mort- 
gag(>e, pawnee, nor vendee, and coidd confer 
no right on the di^fendant to retain posses- 
sion, nor would his rele.'ise be of any avail. 
Ah by the transaction of May no rights were 
acipiircd by the defenilant or the witness, 
and ns the Instructions related thereto, they 
must 1)0 regarded as Immaterial. Excep- 
tions overruled. 

SIIEPLKY, 0. J., nnd TENNEY and CUT- 
TING, JJ., concurred. 



CHATTEL MORTGAGES. 



16? 



HARDING T. COBURN. 

(12 Mete. 333.) 

Snpicme .Tmlicial Court of Massaehusetts. 
Marcli Term, 1847. 

This was an action of trespass against a 
deputy slioi-iff for taking and carrying away 
one wagon carriage, ironed, one wagon body, 
partly fluislied, tive hundred felloes, two hun- 
dred carriage hubs, one cab body, one wheel 
jack, two axle-bar arms, one set of axle bars, 
a lot of scrap iron, and one hoop; all of the 
value of $420. 

At the trial in the court of common pleas, 
before Ward, J., the defendant .iustified un- 
der a writ against Rufus Rowell, as whose 
property the defendant attached the chattels 
described in the plaintiff's writ. The plain- 
tiff claimed the chattels under two mortgages 
made to him by said Rowell. The first mort- 
gage was dated July 13, 1S43, and described 
the mortgaged property as follows: "All and 
singular the stock, tools, and chattels belong- 
ing to me, in and about the wheelwright's 
shop occupied by me, situated on the easterly 
side of the Dorchester turnpike, in that iiart 
of Boston called South Boston." The second 
mortgage, dated .Tune 12, 1844, was of "the 
following described stock, chattels, and arti- 
cles, situated and being in and upon the 
land and buildings occupied by me on the 
Dorchester turnpike, in that part of jjostou 
called South Boston, viz.: Six hundred hubs; 
four thousand feet of ash plank; two thou- 
sand feet of oak plank; four thousand feet 
of bass wood; four thousand feet of spokes; 
ten sots of wheels; ten wagon bodies; four 
exijress wagons; ten wagcin carriages; a 
blacksmith's shop; all my tools and imple- 
ments in my wood shop, paint shop, and 
blacksmith's shop; and all other my personal 
property situated as aforesaid, together with 
all other personal property which I may put 
on said premises during the term hereinafter 
mentioned [one year] in the place of property 
above enumerated, which may be sold and 
delivered by me during said term." 

The plaintiff gave in evidence the following 
demand on the defendant, and statement of his 
claim against Rowell: 

"To Daniel J. Coburn. Deputy Sheriff: I, 
Wilder Harding, of Boston, do hereby de- 
mand payment of, and indemnity for, the 
amount stated in the following account, viz.: 

Rufus Kowell's duebill to me, dated Feb- 
ruary 37tli, 1>44, for $ 4 50 

Kufus Rowell's note to me, dated May 2d, 

lS4i, for 325 .50 

Rufus Rowell's note to me, dated Mav 
tilh, 1844, for ". 174 83 

Rufus Rowell's note to me, dated May 

6th, 1844, for 270 00 

Rufus Rowell's note to me, dated May 
29th, 1844, for 835 50 

Rufus Rowell's note to me, dated July 
19lh, 1S44, for 63 00 

$1,173 33 

"All the above demands are now due and 
payable from said Rowell to me. 



"I also demand of yon Indemnity for my 
liability as indorser. for the acconimodalion 
and beuetit of said Rowell, of the following 
described notes of hand, viz.: 

Rufus Rowell's note to me, due October 
8th, 1S44 J 352 67 

Rufus Rowell's note to me, dated Nov. 
3d, 1843, pavable in one year from date, 
for ". 1,000 00 

Rufus Rowoll's note to me, due Decem- 
ber 1st, 1844 304 8:i 

$3,830 8:i 

"The foregoing demand is made on you 
in consequence of an attachment made by 
you, on a writ in favor of Phineas E. Gay 
and C. E. Stratton against Rufus Rowell, re- 
turnable at the next October term of the 
cotu't of common pleas for the county of 
Suffolk; which property I claim to hold un- 
der two mortgages executed and delivered 
by said Rowell to me,— the one dated July 
13th, 1843, recorded in the registry of mort- 
gages for the city of Boston, lib. 3.5, fol. 
23'J; the other dated June 12th. 1844, and 
recorded in said registry, lib. 40, fol. I'.i. 

"Boston, September 23d, 1844. 

"Wilder Harding." 

It was admitted that no part of the proper- 
ty attached was specifically described in the 
last mortga,ge. But the plaintiff contended 
that it passed under the general clause in 
the mortga.ges. 

It appeared that Rowell was extensively 
engaged in carriage building at South Bos- 
ton, and there occuisied one large lot of land, 
having distinct shops thereon for the differ- 
ent branches of his business, but all con- 
nected together, so as to make one range of 
buildings; and that the mortgaged property 
was in these premises. 

The plaintiff called witnesses to show that 
the identical property attached was on said 
premises at the date of the last mortgage. 
This evidence was admitted, though objected 
to by the defendant; but the judge ruled 
that no articles passed under the mortgage 
but such as were on the premises at the date 
of the mortgages. 

The plaintiff's evidence then tended to show 
that two axle arms, $2; one cab body, ?40; 
one hundred and twenty-five hubs, $62.50; 
and one hundred and seventeen felloes, .$4.68, 
—were the property of Rowell. on his prem- 
ises, at the date of the second mortgage, and 
were included therein, under the general 
clause; that, besides the one hundred and 
twenty-five hubs above named, there were 
six hundred other hubs, specifically named 
in said mortgage, and not attached by the 
defendant; that the cab body was on the 
premises, at the date of the mortgages, un- 
finished, and that work and materials had 
been added to it since. 

The plaintiff introduced evidence tending 
to show that his claim against Rowell, under 
the mortgages, was substantially correct, as 
stated in his demand upon the defendant. 

The defendant's counsel then made the fol- 



106 



CHATTEL ilOHTGAGES. 



lowing objections to the maiuteuauce of tlie 
plaintiff's action: (1) That the first mortgage 
was void. The court so ruled, and the plain- 
tiff abandoned that mortgage at the trial. 
(2) That the second mortgage passed no prop- 
erty besides that which was specilically and 
particularly described. But the .iudire ruled 
that the property situate on the premises at 
the date of the mortgage, and included iu the 
general description in the mortgage, might 
pass, though not specifically set out. (3) That 
the specific enumeration of six hundred hubs 
in the mortgage excluded the other one hun- 
dred and twenty-five hubs from passing un- 
der the general clause. But the judge ruled 
that they might pass, if such was the inten- 
tion of the parties at the time. (4) That 
said mortgage should not cover any property 
which had been changed by mamrfacture 
since the date of the mortgage. But the 
judge ruled, and instructed the jury, that if 
so much labor and new material had since 
been added by Rowell to any article mort- 
gaged as substantially to change it. or so 
that the subsequent additions of labor and 
material became an important part of its 
present value, it would not pass to the mort- 
gagee; but that, if it remained substantially 
the s;ime, it might pass. (5) That the plain- 
tiff's demand and statement in writing were 
in form insufficient. But the judge ruled oth- 
erwise. ((!) That the plaintiff's said demand 
was insufliciont, because his claim, as proved, 
and that set out in his written statement, 
were not the same in amount. The judge 
ruled and inslnicted the jury that it was in- 
cumbent on the plaintiff to prove his written 
statement to be substantially true and cor- 
rect; that any fraudulent or substantial er- 
ror in his statomcnt would defeat his action; 
but that no slight, innocent, and immaterial 
niisslatemeut would defeat his action, if the 
Jury were satisfied tliat his statement was 
substantially correct and true. 

It appeared that the defendant, before mak- 
ing the atUichment, took copies of the two 
mortgages to the premises of Rowell, and 
laying aside, by the assistance of Rowell. all 
tlie articles specifically enumerated In the 
,><cenn(| mortgage, attached all other articles 
Ilieie found. And It also appeared that Row- 
(•II, after making the moiigages, coullnticd 
to conduct his business as usual, remaining 
in possession of the property, and changing 
It by manufacture, and for other proi>erty, 
and nii.xing it with biB other newly-purchased 
properly. 

Tlu" plnlntirr clahncd to hold nil the pmp- 
erly, new and old, by virtue of hl.s ninrtgiiges. 

The ilefeii.lanl objected that the pliilnliff. 
not having iiointed out and demanded the 
preelse arlleles which he cl»lm<>d, and hav- 
luK perinltled the mortgagee (o remain Iu pos- 
session, and to mix the mortgaged propeity 
with lil.H newlya<'ipilred property of the same 
kind, the action of lr(>spa,sH coiilil not be 
inaliilalned. I'pon thin point (it being adiiilt- 
li'd that the plaiiilKT <'laliiii'd b>>na tide the 



whole of the property as covered by his 
mortgages, the newly-acquired as well as the 
old property) the judge ruled against the de- 
fendant. 

The defendant also objected that the plain- 
tiff's demand was insufficient, because it did 
not distinguish the property claimed imder 
each mortgage, nor the amount of the plain- 
tiff's lien on each part of it, but was gen- 
eral on both mortgages. B>it the judge over- 
ruled the objection. 

It was agreed by the parties that the jury, 
if they should find for the plaintiff, might 
I'eturn a verdict specifying as to what ai- 
ticles they found. The jury found the de- 
fendant guilty as to the four items above 
mentioned, viz. two axle arms, one cab body, 
one hundred and twenty-five hubs, and one 
hundred and seventeen felloes, and assessed 
damages at $109.18; and not guilty as to the 
other articles mentioned in the plaintiff's 
writ. The defendant alleged exceptions to 
the foregoing rulings and instructions of the 
judge. 

D. A. Simmons, for plaintiff. Mr. Ellis, for 
defendant. 

DEWEY, J. The first point arising upon 
the mortgage under which the plaintiff 
claims to hold the property iu controversy 
is as to the validity of a general descriji- 
tion of the property mortgaged; such as "all 
my tools and implements in my shop in B.," 
or other equally general words of descrip- 
tion. It is insisted by the defendant tliat 
such general description has no legal force 
and el'l'oct. and that nothing short of a spe- 
cific dcsiription of the various articles mort- 
gaged can avail a mortgagee relying upon a 
recorded mortgage, and the possession re- 
maining with the mortgagor. No direct au- 
thorities are cited to establish this position. 
although some cases are referred to giving 
some couuteuani'e to such doctrine. But 
the argument principally pressed upon oiu' 
consi<leration was that of the importance of 
such construction of the law as tlie only one 
that would give pffeclual notice to all con- 
cerned of wliat was actually intended to be 
conveyed by the mortgage. 

AVe all feel the force of this argument, and 
the great importance of requiring as mueli 
cert.'iinly In contracts of this nature as the 
case will reasonably admit. If It were prac- 
ticable to set forth, on tlie face of the mort- 
gage, with entire precision, all the speeilie 
articles enibr.'iced in It in such a manner 
that the iuspei-tlon of the mortgage, without 
reference to any other evidence or .source of 
Informal Ion, would enable one to ascertain 
with certainty the jiroperty mortgaged. It 
wo\dd lie highly Important anil useful tiiat 
Bllch description of the itroperly sln'Uld be 
required to be given In every case. But a 
Utile conslderath)!! has sutislled us, and mtist 
satisfy any one, that In a large portion of 
the cases resort must be had to parol evi- 
dence to ascertjiin the Identity of the prn|i 



CIIATTKL MUUTGAa KS. 



1G7 



ei-ty niortgagod. Most personal property 
must, from the nature of the case, be de- 
scribed in such general terms as to leave no 
other altci-native but to resort to parol evi- 
dence to identify it. Apparently it seems a 
more bald description to say "all my house- 
hold furniture" than to enumerate the ar- 
ticles, and describe them as "two dozen of 
chairs, Ave tables," etc.; but in reality the 
latter will require extrinsic evidence to iden- 
tify the property as much as the former 
would. Or take the case of a mortgage of 
live stock on a farm. The general descrip- 
tion would be, "all my stock on my farm." 
The particulars are, "ten cows, two yoke of 
oxen," etc.; but in both you must rely upon 
other sources than the mortgage for the 
identity of the property mortgaged. 

There is nothing in the statute itself (Rev. 
St. c. 74) prescribing the form of mortgages 
of personal property. The statute deals with 
them as instruments known and recognized 
by the common law, and only provides as 
to the possession of the property being re- 
tained by the mortgagee, or that the mort- 
gage be recorded in the proper otfice. The 
statute leaves in full force a mortgage at 
common law, if the mortgagee takes and 
continues the possession in himself. Such 
mortgages, with general descriptions of the 
articles, have ever been considered good. 

Several cases have been before us which 
were open to the objection now raised, and 
so far, therefore, as a silent acquiescence in 
such cases by counsel would furnish any in- 
ference that the objection was untenable, 
the plaintiff is entitled to the benefit of it. 
Perhaps no very strong inference should be 
drawn from that circumstance. But the 
case of Winslow v. Insurance Co., 4 Jletc. 
(Mass.) 30G, seems to have raised the pre- 
cise question we are considering. It was a 
mortgage of "all and singular the goods, 
wares, stock, iron, tools, manufactured ar- 
ticles, and property of every description, be- 
ing situate in or about the shop or building 
now occupied by me in Hawley street." The 
mortgage in that case was not only liable to 
the objection that it was general in its de- 
scription of the property, but also to the fur- 
ther objection that it was imperfect and in- 
complete, and contemplated something fur- 
ther to be done, inasmuch as it also provided 
that "a particular schedule of the property 
shall be annexed hereto as soon as conven- 
iently may be." No such schedule, how- 
ever, was annexed; but the court held the 
general description of the property sufficient 
to entitle the mortgagee to hold the same. 
Nor will the enumeration of certain specific 
articles prevent others of like kind, if in- 
eluded in the general description, from pass- 
ing under the mortgage. 

The next question raised relates to the 
ruling as to the property In certain articles 
that had undergone a change by manufac- 
ture, after the date of the mortgage and be- 
fore the attachment by the defendant. The 



ruling upon this point was, we think, suffi- 
ciently favoiablc to the defendant; perhaps 
too much so in reference to the effect of sub- 
sequent additions of labor and material in 
divesting the mortgagee of his right of prop- 
erty. We understand this instruction to 
have been that the article must remain sub- 
stantially the same in order to preserve the 
property in the mortgagee; and, if such iden- 
tity was continued, additions, not making 
an important part of its whole present value, 
would not divest the mortgagee of his Inter- 
est. 

The defendant further objects to the suffi- 
ciency of the demand of the plaintiff, and 
his statement of the amount due on the mort- 
gage. To sustain the objection he rehes up- 
on the case of Moriarty v. Lovejoy, 23 Pick. 
321. We think the cases distinguishable, 
and particularly in this: that in the case 
cited the statement of the mortgagee did 
not allege that it was a mortgage of the 
property then attached, and in the hands of 
the oflicer, which latter averment is substan- 
tially found in the present statement, and to 
the extent of the property then actually at- 
tached and in the defendant's possession; 
and this is a sufficient demand. 

It is next objected that the ruling of the 
court was erroneous upon the question of a 
supposed variance between the plaintiff's 
statement of the amount of his claims under 
the mortgage and the actual sum which, up- 
on a just and true account, the jury would 
find due, upon the evidence in the case. The 
question before us is "not as to the weight of 
the evidence upon this point, or whether the 
jury found a verdict against the weight of 
the evidence; but whether the verdict was 
found under proper instructions from the 
court. 

If the amount stated might, upon the evi- 
dence, have been found a just and true ac- 
count of the liability arising under the sec- 
ond mortgage, then the finding was well au- 
thorized. We understand the ruling of the 
court to have required the jury, before re- 
turning a verdict for the plaintiff, to find 
that there was no material misstatement of 
the amount due from Rowell to the plaintiff; 
and this implies that it was not overstated. 
If it were so to any amount proi^er to be re- 
garded in a court of justice, the defendant, 
under this ruling, must have had a verdict 
In his favor. The instruction seems suffi- 
ciently guarded. This subject has been be- 
fore us recently in the case of Rowley v. 
Rice. 10 Mete. (Mass.) 7, to which we refer. 
Applying the principles of that case to the 
present, if there were an overstatement of 
the amount due to the ijlaintiff in the de- 
mand made by him, yet the whole facts 
would present a case where, under that deci- 
sion, no damage had accrued to the defend- 
ant by the overstatement, as he would have 
had no inducement to redeem the property 
if the amount due had been statetl with the 
most serupulous accuracy; the property in 



168 



CHATTEL MORTGAGES. 



controversy being of much less value than 
the debt secured by the mortgage, supposiug 
the amount had been truly stated. 

It is further objected that the plaintiff can- 
not maintain the action, although he may 
have been the owner of sundry articles taken 
by the defendant by virtue of a writ of at- 
tachment against the mortgagor; inasmuch 
as the articles now claimed by the plaintift' 
were found in possession of the debtor, and 
interuiiugled with various other articles that 
were not mortgaged, and which were prop- 
erly attached as the property of the debtor, 
and the plaintiff not having pointed out the 
precise articles claimed by him. To a cer- 
tain extent the principle here relied upon by 
the defendant has been sanctioned by the 
court. The leading ease was Bond v. Ward, 
7 Mass. 123. This was followed by Sawyer 
V. Merrill, 6 Pick. 478, and Shiimway v. llut- 
ter, 8 Pick. 443. The principle settled by 
these cases was that, if the goods of a third 
person in possession of the debtor, and so 
intermingled with the debtor's goods that 
the otiicer, on due inquiry, cannot distiuguish 
them, the owner can maintain no action 
against the otticer, until notice, and a de- 
mand of his goods of the oflieor, and a re- 
fusal by him. All these cases presented this 
point as arising upon one species of property, 
viz. household furniture. They were cases 
wliere no dilticulty existed in pointing out 
the precise articles claimed, and where the 
omission to do so, as it tended to entrap a 
public officer in the diseliarge of his duty, 
might reasonably be held to bar his right of 
action. They were cases where the owner 



knew the precise nature and extent of his 
claim, and the articles owned by him; where 
he had it in his power to designate and point 
out those articles, in distinction from other 
articles to which be made no claim. And 
the rules of fair dealing may well require, 
under such circumstances, that the particu- 
lar articles claimed by him be pointed out 
and demanded before the officer is sued for 
taking and detaining them. To this extent 
this rule may be a reasonable and proper 
one, but care must be taken not to apply it 
beyond those cases where such pointing out 
of specific articles may be reasonably re- 
quired of the party. As it seems to us, the 
rule should not be applied here. The plain- 
tiff held a general mortgage, which, in its 
terms, covered all the articles on certain 
premises named in the mortgage, with tlie 
further provision that the mortgage should 
also embrace "all other personal property" 
which the mortgagor might "put on said 
premises," etc. This last provision, thougli 
of no effect to pass subsequently acquired 
property (10 Mete. 481), might well be suii- 
posed by the plaintiff to have tliat effect; 
and a general claim made by him to all tlio 
property, uuder such mortgage, might not fur- 
nish any evidence of a design to mislead tlie 
officer. Uuder these circumstances, we think 
the plaintiff was guilty of no such nonfeas- 
ance in not pointing out the articles to which 
the mortgage did attach, and disclaiming all 
others, as should bar him of his right to 
recover for such of the articles as are now 
shown to belong to him. 
Exceptions overruled. 



CHATTEL MORTGAGES. 



109 



FIRST NAT. BANK OF MARQUETTE et al. 
V. WEED et al. 

(50 N. W. 8(>4, 89 Mich. 357.) 

.Suprome Court of Michigan. Dec. 22, 1891. 

Appeal from circuit court, Gogebic county, 
iu chancery; William D. Williams, Judge. 

Action by the First National Bank of Mar- 
quette aud others against Alfred Weed and 
others. From the judgment of the court below 
complainants and several of defendants ap- 
peal. Modified and atlirmed. 

J. E. Ball and Ball & Hanscom, for appel- 
lants. Flower, Smith & Musgrave and Tom- 
kius & Jlerrlll (C. F. Button and Benton Han- 
chett, of counsel), for appellees. 

LONG, J. The bill in this cause was filed 
for the purpose of declaring a certain bill of 
sale, given by A. Weed & Co. to Hoxie & Mel- 
lor. a chattel mortgage as security for certain 
.accommodation paper made aud indorsed by 
Hoxie & Mellor. aud used by A. Weed & Co. 
in their business, and to decree the same to be 
a lien upon the logs described in said bill 
of sale, and the lumber and other material 
manufactured therefrom, and that the same 
lie declared a trust fund for the payment of 
such accommodation paper; to declare the ar- 
ticles of agreement or sale by said A. Weed 
ic Co. to the South Branch Lumber Company 
null and void as against said bill of sale given 
to Hoxie & Mellor; that the bill of sale be 
decreed to be a lien upon said property in the 
nature of a chattel mortgage prior to the pm'- 
chase of the said South Branch Lumber Com- 
pany; that a certain chattel mortgage held 
by the First National Bank of Ashland, Wis., 
lie declared to be a lien subsequent to the 
lien of the complainants upon said property; 
and that the accommodation paper held by 
the complainants be first paid out of the pro- 
ceeds realized from the sale of the logs. The 
bill asked for an injunction against defend- 
ants restraining them from interfering with, 
removing, or disposing of the logs, lumber, 
lath, shingles, or timber, and for the appoint- 
ment of a receiver. Upon the hearing in the 
court below, a decree was made from which 
foniiilaiiiants and several of the defendants ap- 
peal. On November 28, 1889, A. Weed & 
Co., composed of Alfred Weed and Paul Weed, 
who were engaged in the business of getting 
out logs, manufactm'ing them into lumber, and 
selling the lumber, made with Hoxie «& Mel- 
lor the following ■ contract: "Antigo, Wis., 
Nov. 28, 1SS9. This agreement witnesseth 
that Hoxie & Mellor, in consideration of two 
promissory notes of A. Weed & Co., for $2,500 
each, dated to-day, one due July loth next, 
and one due Oct. loth next, without interest, 
hereby agree to advance to A. Weed & Co. 
their notes for such amounts and at such times 
as will be necessary to carry on A. Weed & 
Co.'s business at Ramsay, and for the pur- 
pose of logging a certain four million tract 



at Ashland. Hoxie & Mellor also agree to in- 
dor.se A. Weed & Co.'s notes for .$14,<XJ0, for 
payment of purchase price of above fom- mil- 
lion feet of timber. It is agreed between both 
parties that the amount of notes advanced for 
Ramsay business shall not exceed .fTO.tXJO in 
all at any one time, and that the amount ad- 
vanced for Ashland business shall not exceed 
$30,000 in all at any one time, including the 
indorsement of $14,000 for purchase price of 
limber. A. Weed & Co. agree to use Hoxie & 
Mellor paper at such places as will not inter- 
fere with the conducting of their (Hoxie & 
Mellor's) other business, and also agree that 
all notes shall be taken up by them before 
Dec. 31st, 1890, out of the proceeds of sales 
of stock. Hoxie & Mellor. A. Weed & Go." 
Under thi.s contract notes were advanced by 
HoxJe & Mellor to A. Weed & Co., and re- 
newals of such notes were made by Hoxie & 
Mellor up to April 5, 1890, amounting to $108,- 
000. 

On Jlarch 30, 1890, Paul Weed, who acted 
for A. Weed & Co., wrote to Mellor, who acted 
for Hoxie & Mellor, the following letter: 
'Ashland, AVis., March 30, 1890. Mr. E. W. 
Mellor, Antigo, Wis.— Dear Sir: We Inclose 
the last $3,o00 note for signature and return, 
as per my letter of recent date. We fin- 
ished the last of our logging oijerations on 
April 2, and they have been very satisfactory. 
As fast as we market our lumber we shall 
retire the notes out, but that will not begin un- 
til June or July. We have arrangemeuts to 
take care of our renewals In the meantime. 
I did not see Bishop but a few minutes, ow- 
ing to a mistake, and we having a lawsuit 
on our hands the following day. Did he take 
the logs? Youre, truly, Paul Weed." To this 
letter Mellor replied by letter of April 5th, 
as follows: "Antigo, Wis., April 5, 1800. Paul 
Weed, Ashland, Wis. — Dear Sir: Your favor 
of the 30th ult. came while I was away; hence 
the delay in replying. I return the note here- 
with, as it is Impossible for me to sign it under 
existing circumstances. Will explain more ful- 
ly when 1 see you. Expected to see you ere 
this, and, if you are not coming down soon, 
let me know, and I will go up there, as I 
must see you ere long. I inclose you also 
your note which was renewed. Yours, truly, 
E. N. Mellor." 

After receiving this letter, Paul Weed went 
to see Mellor at Antigo, and there executed to 
Hoxie & Mellor the bill of sale which com- 
plainants, by their bill, claim was iutended 
lis seciH'ity for certain notes indorsed, and 
thereafter to be indorsed, by Hoxie & Mellor. 
This bill of sale is as follows: "Know all 
men by these presents, that A. Weed & Co., 
of Itamsay, Gogebic count.v, Michigan, of the 
first part, for and in consideration of the sum 
of seventy thousand dollars lawful money of 
the United States to me in hand paid, at or 
before the ensealing and delivery of these 
presents by Hoxie «& Mellor, of the second 
part, the receipt whereof is hereby acknowl- 



170 



CHATTEL MORTGAGES. 



edged, have bargained, sold, granted, and ' 
conveyed, and by these presents do bargain, 
sell, grant, and convey, unto the said parties 
of the second part, their executors, adminis- 
trators, and assigns, twenty-eight tliousand 
pine saw-logs, scaling seven million feet, more 
or less. Said logs are now lying and being in 
the Black river, near Ramsay, Gogebic coun- 
ty, Michigan. To have and to hold the same , 
unto the said parties of the second part, their 
executors, administrators, and assigns, for- 
ever. And we do, for our heirs, executors, 
administrators, and assigns, covenant and 
agree, to and with the said parties of the sec- 
ond part, to warrant and defend the same de- \ 
scribed goods, hereby sold unto the said par- 
ties of the second part, their exccutoi-s, ad- ' 
ministrators. and assigns, against all and ev- 
eiy ijerson and persons, whomsoever. In wit- 
ness whereof we have hereunto set our hands 
and seals the fifteenth day of April, A. D. 
1S90. A. Weed & Co. [Seal.] Signed, seal- ! 
el, and delivered in the presence of George [ 
R. Fraser." j 

When this bill of sale was made the logs 
were where they had been banked. The driv- 
ing of them had not commenced, and A. Weed 
& Co.'s men were on the ground prejiaring for 
the drive. They continued the work, and j 
drove the logs. The drive started about the 
17th of April, and was linished about the 4th 
of May. A. Weed & Co. began sawing the 
logs aljout May 5th, and continued sawing 
ihcm until some time in September, when all 
I he logs in controversy had been sawed. The 
bill of Siile before set out was not tiled until 
the loth day of May, 1890. On the 11th of 
.Tune following, A. Weed & Co. made a con- 
tract of sale to the .'^outli Branch Lumber Com- 
pany of all the merchantable white pine lum- 
ber which linil then been sawed from the logs, 
and all which they should saw from the logs, 
as follows: "Chicago, 111., ,Iune Utli, ISOO. 
South Branch Lumber Company, Chicago, III.: 
We will sell you all the merchanlabic while 
pine lumber now piled at our mill at Itamsay; 
also the Uunber from logs now in Black river 
and tributaries, and to be sawed at our mill 
In It.'imsay,— the cnlire cut being about seven 
million feet,— for the sum of $11 per M ft., 
board measure, f. o. b. cars at our mill. Tlie 
10 ft. c. and belter to go in at the s;ime price, 
and the <! and S ft. c. and better at .$10 per M 
feet. The mill culls, and l>, 8, and 10 ft. com- 
inou and poorer, are not n parcel of this 
agi'e<'inent. The lumber to be nil cross-piled, 
and grado.s kept sepanitc, as directed by you. 
We will also sell you our exira Hiar shingles 
ut .$1.7,'), and the dlmeiislim dear shingles 
at ?'J.'JO per M, f. o. b. ears at Itains.iy. Lum- 
ber to be seKled for on the basis of ,$i;{ per 
.M on MeCllntoek'H cstlm;ile, llic Hrst of each 
iiii>nlli, and you to glvt; n« your nliu'ty-day 
paper for the same, 'i'lie iundier to be mnnn 
faelured from lime to time as directed by 
you or your representative; and we shall l:\Ur 
proper care in piling and covering sjinn' t'> 



prevent staining, and see that no lumber is 
piled nearer than 150 ft. of the mill, to pro- 
tect you in insurance. When estimates are 
taken, each pile to be marked, 'The property 
of the South Branch I^umber Company.' We 
also agree to make good to you any expense 
or loss that you may be put to by any claims 
or otherwise made against this lumber by oth- 
er parties. Final settlement to be made as 
per the price of $14 on the completemeut of 
the shipment of all the lumber. Lumber to be 
inspected by C. M. E. McClintock, each pay- 
ing one-half of the same. We also agree to 
hold this lumber in piles until reduced in 
weight not to exceed 2,500 lbs. per M. ft. 
You also have the privilege of letting this 
lumber remain here as long as you wish, pro- 
viding that it does not interfere with the ne- 
cessities of our mill for piling room. Very re- 
spectfully yours, A. Weed & Co. We accept 
the above. The South Branch Lumber Co. 
B. F. Ferguson, Treas." 

After this contract had been made, and 
the parties begun to act upon it, and to siiip 
lumber under it to the South Branch L\uu- 
ber Company, a further agreement was 
made that the South Branch Lumber ComiKi- 
ny should take the lower grade of lumber 
which should be piled in the piles of lum- 
ber made under the contract of 3\\ue lUh. 
and this became a part of the contract. On 
September (jth the lumber which had been 
thus sawed, and which is the lumber in con- 
troversy between the complainants and the 
South Branch Lumber Company, was deliv- 
ered into the possession of the defendant 
the South Branch Lumber Company, and 
continued in its possession until it was seiz- 
ed by attachment on September 16th and 
17th. The lumber at this time had been es- 
timated by McClintock. It appears tJiat aft- 
er the lumber had been estimated, ami had 
been taken possession of by the South 
Branch Lumber Company, and on Septem- 
ber ICilh, In a suit by the First NatiDual 
Bank of Bessemer against Iloxie & Mellor 
an<l A. Weed & Co.. the lumber was seized 
by attachment, and on the 17th of Septem- 
ber it was again attached in a suit brought 
by Ihi" complainant the First National Bank 
of Mar(iuelle against lloxle & MoUor and A, 
Weed & Co. On the 21th of September the 
South Branch lamdier (^ompauy replevied 
the hnnber from the sheriff, who held it un- 
der these wi'its of allaehmcnt. The defend- 
ant the Scuith Branch Lumber Company, up- 
on Its contr.Mct of purchase of the lumber in 
controversy from A. Weed & Co.. executed 
and delivered to A. Weed & Co. lis nei:otla- 
ble promissory notes to the amouni of iS.'iS,- 
(H»0. These notes were made and delivered 
(o A. Weeil iV: ("o., as follows: About June 
•Jlst, the sum of $'.',".,0( lO ; August 1st. $1S,- 
l)(K); SepRMuber 1st, $15,000. The flrst pay- 
ment was made ui)on the certilleale of the 
Inspector agreed uiion In the contract. The 
last two payments were made without any 



CHATTEL MORTGAGES. 



171 



sucb certificate, or any inventory of Mr. Mc- 
Clintock, that being waived by both pnrties. 
All those notes have been paid by the South 
Kvanch Lumber Company. The complain- 
ants are the holders of a part of the notes 
made by A. Weed & Co. and Hoxie & Mel- 
lor under the contract of November 28. 1889. 
All such notes held by the complainants 
were made after the sale of .Tune lltli by A. 
Weed & Co. to the South Branch Lumber 
Company. Some of these notes are renew- 
als of notes made prior to that date. The 
complainants bought them in open market 
for a valuable consideration, and without 
knowledge of the existence of the bill of 
sale from A. Weed & Co. to Ho.'cie & Jlellor, 
heretofore set out, given April 1.5. ISilO. As 
the holders of these notes, the complainants 
claim by their bill to be subrogated to all 
the rights of Hoxie & Mellor under the bill 
of sale, with the right to foreclose the same 
as a chattel mortgage given to secure such 
notes. The issue between the complainants 
and the South Branch Lumber Company is 
whether, under the contract of June 11th. 
the South Branch Lumber Company has ae- 
(juired such rights in the lumber that it 
could hold the lumber as against the foreclo- 
sure by the complainants of the bill of sale 
of April 15th. 

Some considerable testimony was given to 
show what the agreement and understand- 
ing was between A. Weed & Co. and Hoxie 
& Mellor at the time the bill of sale was ex- 
ecuted, which, taken with the bill of sale, 
would constitute a security, and what were 
the terms. The South Branch Lumber Com- 
pany contends that when the bill of sale was 
executed it was the understanding and 
.Tgreement between A. Weed & Co. and Hox- 
ie & Mellor that A. Weed & Co. should con- 
tinue in possession of the logs, drive them to 
their mill at Ramsay, manufactiu'e them in- 
to lumber, sell the lumber, and, by moans 
of the proceeds, pay the notes indorsed or 
signed, and to be indorsed or signed, by 
Hoxie & Mellor, and that Hoxie & Mellor 
would continue to indorse or renew notes for 
A. Weed & Co. to enable A. Weed & Co. to 
do that business; and that in doing that 
busiuess A. Weed & Co. made sale of the 
lumber in question to the defendant by the 
contract of June 11th. It appears that ,?lit,- 
725 of the notes given by the South Branch 
Lumber Company was directly applied to 
the payment of the notes made or guaiau- 
tied by Hoxie & Mellor, and by them given 
to A. Weed & Co., under their contract of 
November 28, 1889. The bill was filed in 
this cause October 1, 1890, setting up that 
the complainants were holders of the notes 
made or guarantied by Hoxie & Mellor for 
the accommodation of A. W^eed & Co., and 
(hat the bill of sale was given for the pur- 
pose of securing Hoxie & Mellor .against any 
loss they might suffer by reason of the fail- 
ure of A. Weed & Co. to pay the promissory 



notes in accordance with the understanding 
of the parties, or to secure the several par- 
ties and persons by whom the said notes 
were purchased; and designated that all 
the property described in and covered by the 
bill of sale was to be and form a fund to se- 
cure the ijayment of such notes. The South 
Branch Lumber Company filed its answer 
and cross-bill, denying that the bill of sale 
was given either to secure Hoxie & ^Mellor 
or the notes; setting up the contract of No- 
vember 28, 1889; alleging that the bill of 
sale was not intended to interfere with the 
manufacture of the logs into lumber, and the 
sale thereof; setting up that the sale to the 
South Branch Lumber Company by A. Weed 
& Co. was made with the know-ledge and 
consent of Hoxie & Medor; that $10,725 of 
the $58,000 which it had paid under its con- 
tract had been applied by A. Weed & Co. 
to the payment of the notes made by Hoxie 
& Mellor for the accommodation of A. Weed 
& Co., and which were outstanding on the 
date of the making of the bill of sale or giv- 
en to renew notes then outstanding; setting 
up that A. Weed & Co.. and all the members 
thereof, were residents of Ashland in the 
state of Wisconsin; that the larger part, if 
not all, of all the logs which the parties iu- 
tended to cover by the bill of sale w'ere in 
the tow'uship of Ironwood. in the county of 
Gogebic, at the date of the execution and de- 
livery of said bill of sale, to-wit, the 15th 
of April, 1890: that the bill of sale was nev- 
er filed in the township where the property 
was at the date of the execution and deliv- 
ery thereof; and that the logs out of whi<h 
the lumber in controversy had been manu- 
factured were not in Black river, near Ram- 
say, on the date of the execution and deliv- 
ery of the bill of sale. By way of cross-bill, 
the South Branch Lumber Company claimed 
that, the parties being before the court, the 
rights of all parties should be determined in 
tJiis cause, and asked to have the further 
prosecution of the attachment and replevin 
suits enjoined and the bonds discharged. 
For the purpose of showing that the bill of 
sale was in fact intended as a chattel mort- 
gage, Mr. Mellor, of the firm of Hoxie & 
Mellor, was railed as a witness, and testi- 
fied that on April 15th there w^ere outstand- 
ing notes made or indorsed by Hoxie & Mel- 
lor for A. Weed & Co. in the sum of .5108.- 
000; that up to that time no security had 
been given; that this was all accommoda- 
tion paper, and made for the accommodation 
of A. Weed & Co. He testified that Paul 
Weed called upon him at that date. April 
15th. and wanted to renew this paper when 
it fell due. He w-as then asked: "Q. What 
did you say to that? A. I said to him that 
if he wanted to renew any more of that pa- 
per we wanted security. Q. What security 
did you get? A. Security on logs at Ram- 
say. Q. State what occurred in regard to 
the giving of the bill of sale, on or about the 



172 



CHATTEL MOUTGAGES. 



15th of April. 1S90. A. Paul Weed came 
(lowu here to see rue about renewing more 
of tiiat paper, and I told him I was very 
sorry we had gone into that deal, and I did 
not want to renew any more without securi- 
ty. He asked me what security we wanted, 
and I told him we wanted a bill of sale of 
the logs there at Ramsay. He said. 'AH 
right, you can have it.' I went out in the 
other room, and got a blank bill of sale, and 
tilled it out, and he signed it, and signed the 
name of A. Weed & Co. * * * Q. Did this 
bill of sale contemplate the security of all 
pajier that was outstanding at the time it 
was given, and any renewals that might be 
issued of such original paper? A. That was 
what the bill of sale was given for. It was 
for the security of the notes that were out- 
standing at the time* and any renewals of 
those notes. Q. Did you have any conver- 
sation with Paul Weed on that point,— about 
the renewal or securing renewals, etc.? A. 
I did have a conversation about that. Q. 
What did he say? A. lie said that, of 
course, the bill of sale was given to secure 
any renewals that might be made. Q. Did 
.vou have any conversation with Paul Weed 
by which it was agreed between you that 
you were to renew au.v stated amounts of 
paper then outstanding? A. Yes. sir; we 
had. Q. State what that conversation was. 
A. He said he would probably want to re- 
new most of the pajier that was outstanding 
at that time. Q. Did you make any agree- 
ment with I'aul Weed not to lilo this bill of 
sale? A. No, sir." The witness further tes- 
tified that he afterwards filed the bill of sale 
in the town-clerk's oftice in the township of 
Bessemer, and that at the time of filing the 
logs covered by the bill of sale were in Klack 
river, at Itamsay; that the head of the jam 
was at the mill at Ramsay, and that he un- 
<lerstood the logs were in a solid jam; that 
A. Weed & Co. were doing business at Ram- 
say, operating a sawmill, manufacturing 
lumber, and were doing a logging business, 
and that their otHce was situate at Ramsay, 
and tliat they were also doing business at 
Asldand, Wis.; that after the bill of sale 
was given they renewed other notes, and 
some new ones wore given, but that they 
wiTe for renewals, though given for difTer- 
ont amounts when they were renewed. The 
witness also testified to having received a 
letter from Paul Weed, dated May 124, IS'.Hi, 
In which \\'ced wrote lilin that he IucIosimI 
• crtalii notes for renewal, and furl her stal- 
fd: "Please ; ign or hnlorse, ns the case may 
be, and send them back to nin In Inclosed 
envelope. Wc d«i not know yet whether we 
shall need to rciii'W much In .Itily or not. 
We expect wc sold our Ramsay stock to-<lay: 
shall know ne-xt week. If we did. It will 
run Into tnone.v fast. W(> send one other 
note of .<:!.i>0(), to renew note of same amount 
duo at Rank of Antlgo, ,Inly 'J1. I hope we 
Hhnll not bave to trouble yon much more. 



Everything running well with us. Yours, 
truly, Paul Weed." The witness further tes- 
tified that he first learned of the sale made 
to the South Branch Lumber Company on 
July 3d, which was by letter; tliat he nev- 
er authorized the sale, and never had any 
talk with A. Weed & Co. about it. 'I he wi - 
ness stated that, prior to this time, he sig'c I 
the bond in certain attachment proceed. ugs 
for A. Weed & Co. to get the logs restoiel 
to those parties, and that he expected them 
to proceed and manufacture the logs and 
sell the lumber; that they were to take caie 
of the notes as fast as they could sell the 
lumber off; that, at the time he signed the 
bond to release the logs from the attacii- 
ment, A. Weed & Co. had spoken of the 
South Branch Lumber Company as a possi- 
ble buyer; and that at that time he entered 
no protest against A. Weed & Co. making 
a sale to the South Branch Lumber Compa- 
ny. The evidence shows that all the notes 
referred to were thus signed and indorsed 
by Hoxie & Mellor under the contract of 
November 28, 1880. Mr. Mellor, in making 
this contract, understood that the notes re- 
ferred to therein were to be carried along 
by renewals of their indorsements until the 
fall of IS'.K), and that A. Weed & Co. by th > r 
contract agreed to take care of them till 
Decendier .-.l, LSiK), and that Hoxie i»i Mellor 
were to continiie their indorsements until 
that time. No other arrangements were ev- 
er made in regard to these notes. Mr. Mel- 
lor also understood that the original agri e- 
ment provided that A. Weed & Co. were to 
saw the logs and sell the lumber and take 
up the notes by that time. 

It is evident from this testimony, and the 
interpretation which Mr. Mellor gave the 
conti'act, and his undcrslanding of the ar- 
rangement between himself and Paul Weed. 
a<tiMg for A. Weed .<t Co., that the bill of 
s!ile was given to secure the performance 
by A. Weed & Co. of the contract of No- 
vember 28, 1S.S0. By the terms of this con- 
tract, which was not changed, or under- 
stood between the parties to h.ave been 
changed. In any respect, A. Weed & Co. 
were to manufacture the logs into lumber, 
sell the lumber, and out of the proceeds 
take up the noli's before December :il, 1>S:K), 
and tlie bill of sale was given to secure 
Hoxie & Mellor for the faithful perform- 
ance of this contract; and It Is evident that 
It was the Intention of the parlies that. 
80 long as A. Weed & Go. went forward 
and exec\il(<d the contract, they would not 
be Interfered with by lloxie .t Mellor, but 
that, should they fall to perform the coii- 
trnct according to these terms, then lloxlo 
& Mellor would h;ivc their remedv under 
the chattel mortgage to enforce jH-rform- 
iinc(>. It Is illllic'ult to underslnnd from the 
testimony of Mr. Mellor or of Mr. Paul 
Weed (which we have not set out here) 
how It can be claimed that Uoxle & Mel- 



CIIATTKL .MOUTGAGES. 



lT:i 



lor had a rif,'ht iiiidor tliis bill of sale— 
wLicU, by tlie airaiitiuiueut between the 
parties at the time of its execution, was 
intended and understood as a security— 
to interfere with A. Weed & Co. in driving 
these logs to the mill, manufacturing them 
into lumber, and selling and disposing of 
the lumber for the purpose of talking care 
of these notes or renewals, when it must 
be conceded that they were to have until 
December 31, 1890, to pay and take up 
such notes, and the renewals thereof, by 
Hoxie & Mellor. who were to carry them 
along upon such renewals until that time. 
By the terms of the contract of November 
28, ISSO, A. Weed & Co. were to have un- 
til that time to pay and take up these notes. 
No change was made in that contract, and, 
by the testimony of Mr. Mellor himself, 
the chattel mortgage into which the bill 
of sale was converted by parol agreement 
was only intended to secure the perform- 
ance of this contract. By the arrangement, 
then, between Hoxie & Mellor and A. Weed 
& Co. they were to have the right to man- 
ufacture and sell this lumber for the very 
purpose of meeting these notes. In this 
view of the case, A. Weed & Co. had the 
right to sell and convey on .Tune 11, 1800, 
all of the lumber manufactured at their 
mill from these logs to the South Branch 
Lumber Company, and the claim of the 
South Branch Lumber Company would 
have priority over any claim which Hoxie 
& Mellor had under the bill of sale, or any 
claim which the complainants might have 
as the holders of these notes by way of 
subrogation. There is nothing upon the 
record to show that the South Branch Lum- 
ber Company had any notice or knowledge 
of the bill of sale held by Hoxie & Mel- 
lor. The only claim of notice to the South 
Bi-auch liumber Company is that the bill of 
sale was filed in the township of Bessemer, 
Gogebic county. It was executed on April 
15 and filed May 10, 1890. A. Weed & Co. 
were non-residents of this state. 

The ouestion of the place of filing the 
mortgage does not become important in 
determining the rights of the South Branch 
Lumber Company. But in determiuiug the 
rights of the defendant the First National 
Bank of Ashland, Wis., it does become Im- 
portant. About September 6, 1890, the firm 
of Hoxie & Mellor failed, and made an as- 
signment for the benefit of creditors, Charles 
V. Bardeen, one of the defendants herein, 
being assignee. About the same time A. 
Weed & Co. became insolvent. On Septem- 
ber 15. 1890, A. Weed & Co. assigned their 
contract with the South Branch Lumber 
Company to the First National Bank of 
Ashland, as security for notes to the amount 
of $56,130, held by said bank, including $41,- 
130 of the said accommodation notes, the 
said bank to pay said indebtedness, and 
the surplus, if any, to A. Weed & Co., after 



paying expense of carrying out the contract. 
The First National Bank of Ashland hel<l 
$41,1.30 of the said accommodation paprr. 
.fO.UL'j of which was discounted Ijy said 
bank. May 3, 1890, and tlie remaiuder at 
sundry times from May 31 to August i:!, 
1890. On September 15, 1890, A. Weed & 
Co. also executed and delivered to the Fir.st 
.\ational Bank of Ashland a chattel mort- 
gage to secure said notes, amounting to 
.fSG.lSO, covering the logs and lumber in 
auestion, besides other property. At the 
same time other mortgages and securities 
were turned out to said bank, but not sufli- 
cient in value to cover the indebtedness. 

The amount of the accommodation paper 
now outstanding and held by parties to 
this action is $86,232.50, some of which are 
renewal notes, the balance being notes dis- 
counted and the monej' used in whole or 
in part to pay up old notes. The First Na- 
tional Bank of Ashland paid out in the 
sawing and taking care of the property 
and carrying out the contract with the 
South Biunch Lumber Company after it 
took possession under its assignment of 
contract and chattel mortgage, the sum of 
$11,804.11, and for taxes on the lumber 
.$456.92. The particular parts of the decree 
to which the First National Bank of Ash- 
land excepts are those which find: "That 
the lien of said bill of sale is prior to the 
lien of the said First National Bank of 
Ashland created by its said chattel mort- 
gage dated September 15, 1890. * * • 
That the said First National Bank of Ash- 
land, the First National Bank of Bessemer, 
and the comi>lainants herein, excepting the 
First National Bank of Appleton, are en- 
titled to share pro rata (provided, however, 
that the said First National Bank of Ash- 
land shall first exhaust its other security 
obtained by it as security for the said notes 
and other demands) in the surplus tliat 
shall remain after satisfying the said sum 
so ascertained to be due to said bank as 
aforesaid, and for which it has a first lien. 
And that they shall so share, to the amoimt 
and extent onl.y of the notes, respectively, 
held by them, and secured by said bill of 
sale of April 15, 1890, namely, notes then 
outstanding, signed or indorsed by Hoxie 
& Mellor for the accommodation of said A- 
Weed & Co., and renewals of said notes." 
The court having found that the bill of 
sale from A. Weed & Co. to Hoxie & Mel- 
lor was never recorded in Ironwood town- 
ship, where the logs therein intended to be 
described were situated, and that the con- 
tract of the South Branch Lumber Com- 
pany is prior to the lien of said bill of sale, 
the First National Bank of Ashland con- 
tends that it was error in the court to hold 
that the lien of the bill of sale is prior to 
the lien of the First National Bank of Ash- 
land. 

It is urged on behalf of defendants that 



174 



CHATTEL MORTGAGES. 



the bill of sale was void ns to third parties, 
lieLUUSe the description did uot cover the 
property iuteuded to be conveyed, the bill 
of sale calling for logs "in the Blaciv river, 
near Ramsay," while a large portion of the 
logs in question were not in the river, but 
in roll-ways on the banks of the river, and 
six miles from Ramsay. It is also contended 
that the mortgage was void as to the First 
National Banli of Ashland, for the reason 
that it was not filed in the proper town- 
clerk's office. It is conceded that the mort- 
gage was never filed in the to\vn-clerk"s 
office where the logs were situate at the 
time the bill of sale was executed and de- 
livered; that is, in the township of Iron- 
wood. But couusel for complainants claim 
that the mortgage having been filed in the 
town-clerk's office of the town of Bessemer, 
and the logs having been floated into that 
township, and being in that town at the 
time the mortgage was filed, such tiling was 
proper. Section GIO.'!. How. St., provides: 
"Except when the mortgagor is a non-resi- 
dent of the state, when the mortgage, or a 
true copy thereof, shall be filed in the office 
of the township cleric of the township, or 
tlie cit.v clerk of the city, or city recorder of 
cities having no officer known as 'city 
clerk,' whore the property is." The same 
section requires chattel mortgages made by 
residents to be filed in the townships where 
the mortgagors reside. Under this statute 
there is but one place for tlie filing of a 
cliattel mortgage when the mortgagor is a 
non-resident of the state, and tliat is the 
townsliip or city where the property is, and 
tlie filing would uot be constructive notice, 
unless so filed. It is plain that it is the in- 
tent of the statute that the filing should be 
in the townsliip or city whore the property 
is at the time of the execution and delivery 
of the mortgage, and not in soiue other town- 
snip or city to which the property may bo 
removed after such execution and delivery. 
It was tlie intent of tlie legislature to fix a 
rule bj' which all inorlgagos should be filed 
and by which all must be governed. This 
precise question has never, until tlie present 
ipi'caslou, been before this court. In nuiiiy 
of the slates it is provided by stalule that, 
in case of non-rosideut mortgagors, the filing 
shall be In the township or village "where 
the property may be at the time the mort- 
gage Is e.\ei-nled." The statute of Massa- 
claiselta formerly provided that ii eliatlel 
mortgage should be recorded whore llie 
moilgagor resided "at the time of making 
the .snnii'." By a revision of the si a lute, the 
word.s, "at the lime of making the same," 
wore oniilled. In William v. Itntterlield, (i 
("ii-sli. 217. the court of .MassachuHetlH, speiik- 
liig or tills omission In the revision, said: 
"TIiIh laller clnusc Iimh been slrh'ken out In 
the Revised Statutes. Whether this wa*i 
done for precision merely, or was Intended 
to chniige the law In a material point. Is 



left wholly in doubt, and has rendered that 
uncertain which was before certain." The 
point was not decided; but the court, even 
when the statute had been changed, was 
doubtful if it were not done simply for pre- 
cision. Under our statute no such doubt 
can arise. This statute has been earned 
upon the statute books for a great many 
years, and no one has ever doubted that the 
time of the execution and delivery of the 
mortgage fixes and determines the place 
where such mortgage must be filed. 

We need not discuss the other questions 
raised by counsel, as this must be decisive 
of the rights of the complainants and the 
First National Bank of Ashland. The bank 
and its officers had no actual knowledge of 
the execution of this bill of sale which we 
have denominated the chattel mortgage, and 
the filing in the township of Bessemer can- 
not be construed as constructive notice. 
The order and decree of the court below 
were substantially: (1) That the bill of sale 
was given to secure the payment of the 
notes, and all renewals thereof, but that it 
was uot valid as against the South Brjinch 
Lumber Company, because uot filed in Iron- 
wood township, where the logs were at the 
date it was given, but not at the date it was 
filed. (2) That the contract between the 
South Branch Lumber Company and A. 
Wood & Co., of .Tune 11, 1890, was an ex- 
ecutory contract for the purchase of lumber 
upon which the South Branch Lumber Com- 
pany had advanced i?.'.8,0tK). (If) That the 
lien of the bill of sale is prior to tlie mort- 
gage to the First National Bank of Ashland. 
(I) 'I'hat the First National Bank of Ash- 
land was entitled to be reimbursed to the 
amount of .flLCKX), for iiviney expended in 
protecting and manulacluring the lumber, 
and a reference is ordered to ascertain 
wliether It is eutitled to more, (o) That the 
First National Bank of Ashland, the First 
.National Bank of Bessemer, the Security 
.'Savings Bank of Ashland, and the complain- 
anis are enlilled to share pro rata In the se- 
c urily, after the First National Bank of 
.Vshliind shall exhaust Its other security, 
cvept that the First National Bank of Ap- 
plclim Is not entitle*! to participate. (Gi 
That a receiver be appointed, that the luiu- 
iier be .sold, and thai lhi> contract witli the 
:<iiulli Branch Lumber Company be carried 
nut, and that the receiver settle with the 
Stmlh llraueh Lumber ("Company tlierefor. 
i7) That a reference be made to ascertain 
llio dani.'iges to the South Branch Lumber 
I'ompaiiy on account of this liijiiiiclion. 

The Scmlh Branch Lumber Company is 
enlilled to hold all that lis contract called 
lor Willi A. \A'ecil iV: Co., and Is In no manner 
affecled by the bill of sale of complainants, 
or any claim whiih llie First National Hank 
may assert. The First National Bank of 
.\sliland, after that, Is eutitled to have Us 
claim allowed for moneys advanced In car- 



CHATTEL MOilTGAGES. 



i: 



lyiu-^ on the business of A. Weed & Co.; 
:iii(l its claim under its chattel mortgage is 
held prior to any claim which the complain- 
.nits may assert under the bill of sale to 
Hoxie & Mellor. The appointment of a re- 
ceiver is eonflnned, and he shall settle with 
the parties from the proceeds of the sales 
in accordance with this opinion. The South 
Branch Lumber Company will recover its 



costs against complainants. The First Na- 
tional Banli of Ashland will also recover its 
costs against the complainants. The decree 
of the court below must be moditied in ac- 
cordance with this opinion. 

CHAMPLIN, C. J., and MORSE and Mc- 
GRATH, JJ. concurred. GRANT, J., did 
not sit. 



176 



CHATTEL mortgages; 



WELCH V. SACICETT et al. 

(12 Wis. 213.) 

Supreme Court of Wisconsin. June Term, 1860. 

Error to the circuit court, Dane county. 

The plaintiffs below, who composed two 
firms doing business under the names, respec- 
tivel.v, of Sackett, Belcher & Co. and Widde- 
lield, Cohn & Co., sued the defendant Welch 
for trespass in taliing and carrying away from 
a building occupied as a store by one Hard- 
ing certain goods, alleged to belong to the 
plaintiffs. 

The answer was: (1) A general denial. (2) 
As to a part of the goods, particularly de- 
scribed, that the defendant took the same as 
the agent of J. Dahlman & Co., by virtue of a 
mortgage executed to them by said Harding, 
and tiled on the ISth of December, 1S5S, in 
the othce of the clerk of the city of Madison, 
where said Harding resided; and as to the 
residue of said goods, that the defendant sein- 
ed the same on the 23d of December, ISoS, by 
virtue of sundry writs of attachment against 
the property of said Harding duly issued out 
of the circuit court of Dane county on that 
day. and delivered to the defendant as shcrilf 
of said county, to be executed; that said goods 
were, at the time of s;iid seizure, the property 
of said Harding; that tlie plaintiffs claim to 
be the owners of said goods by virtue of two 
mortgages, bearing date December 20, 1S5S, 
pui'i)orting to be executed by said Harding,— 
<iue in favor of Sackett, Belcher & Co., and 
the other in favor of said Widdefield, Cohn & 
Co., — but that said mortgages were made by 
.«aid Harding, and lilcd withcjut the request, 
assent, or knowledge of the plaiiililTs; and 
that at tlie time of said seizure said mortgages 
had not been delivered to the plaintiffs, or 
eillior of them, nor to any agent or attorney 
aullioiized by them to receive the s;ime, nor 
had they any knowledge that the same had 
been executed, or ever assented to or ralilied 
the same. The defendant further alleged in 
his answer the rendition of judgment against 
Ki\(\ Harding on the 20lh of January, l,s.")',t, in 
each of the actions in which said warnints of 
attachment were issue<l, the issuing of exe- 
i-ullirns upon such judgments, the sale of the 
pr()p('rty attached, and the ap|)liiali<)n of the 
pnxecds first to the sallsfactiiin of Ihe mort- 
gage to Dahlman & Co., and the residue, pro 
rata, upon said execnllons. 

The jirlnclpal ipiesllon lu controversy be- 
twei'u the parties was whether there liad been 
a delivery of the niorlgiiges to llu! plaintiffs 
Jirlor to the levy of the nttadinienls. Upon 
the trial of the cause the plalnlllTs gave In 
evidence three notes executed by said Hard- 
ing,— one dated August 11, IS.'iS. jHiyable to 
Wlfldefield, (John & Co. for .$27H.(>2, at six 
miinlliH lifter dale; and two dated Angtist 0, 
IViS, payable to Saikelt, Belcher & ("o., one 
for ^Hl.'i.l.S, at four montlm after dale, and 
the otlier for ?(i.'i!).10 at six inontlis after date, 
—and also two mortgages upon all the goods, 



etc., described in the complaint, made by said 
Harding, one to Widdefield, Cohn & Co., and 
the other to Sackett, Belcher & Co., for thr 
security of the notes held by them respective- 
ly, each of which moilgages bore date Decem- 
ber 20, 1858, and contained a clause authoriz- 
ing the mortgagees to take possession of the 
goods whenever they should deem that their 
interest or the safety of the debt required it. 
The defendant objected to the introduction ol 
the notes and mortgages in evidence, upon the 
ground that they showed that the plaintiffs 
had not a joint interest in the goods described 
in the complaint; but the court overruled the 
objection, and the defendant excepted. The 
defendant admitted, for the pui7)oses of the 
trial, that on the 23d day of December, lSr)>. 
he took and carried away the goods described 
in the complaint. The proof as to the execu- 
tion of the mortgages under which the plain- 
tiffs claim title was substantially as follows: 

Harding, the mortgagor, testified that the 

mortgages were executed by him in Madison, 

on the 20th of December, IS.'iS; that the jilain- 

! tiffs resided in the city of New York, and 

were not present at the time of making tlir 

mortga.ges; that the witness employed Mi. 

Haskell, an att(U'ney, to draw them up. and 

paid him for them; that the plaintiffs did unt 

know of the making of the mortgages until a 

I letter could reach them; that he told the firm 

of Collins, Atwdod <fc Haskell to write to all 

the parties to whom the mortgages were given; 

that at the time the defendant took the goods 

under the attachments, on the 2,3d of Deceni- 

I ber, the witness had not heard from the plaiii- 

tilTs; that a letter cannot go to New York and 

back in three days; thai the debts for which 

the mortgages were given were all honest and 

bona fide; that at the time of the execiUiun of 

the mortgages to the plaintiffs he executed 

another tipon the same goods to Swift & C".. 

who afterwards gave up the mortgage, and h:id 

} an attachment levied on the goods, and au- 

' other mortgage to riicliis. Bliss & Co., which 

! has bet>n iiai<i; all the mortgages amounting to 

.fl'i.dOO and upwards, and the morlgngcMl proji- 

erty iM'Ing worth between f2,100 and ;i;2,200, 

at retail piices, at Madison. 

Mr. Haskell testified, In substance, as fol- 
lows: "I drew the chattel mortgages from 
Mr. Harding to Ihe pIjiiidilTs on Ihe 20tli day 
of December, 1K.")S. They were made In oiu' 
ollice. After they were signed, I attached the 
schedules, and then li:inik><l the inortgnges t<i 
Mr. Harding, and said to him: 'Here. Mr. 
Harding, are your nmrlgnges. Tlie.v are now 
at your dlspnsjil.' Mr. Harding then said: T 
su|)poHe they nuist be delivered, must they 
notV I deliver the mortgages to you for the 
mortgagees.' And then he delivered them to 
me. He also recpiesled me to nntlfy the New 
York credKors (hat he had exe<'Uled these 
morlgiiges to them, and to see that they were 
filed. 1 handed the mortgages to (ieorge E. 
Woodward, and re<iuesti'd him to carry them 
to Ihe ilty clerk's ollice, and see that they weie 



CHAT'H.L iMOKTGAGES. 



177 



filed. The mortgages read In evidence are the 
same mortgages. We wrote to the mortgagees 
on the 22d of December, 1858, informing them 
of the maliing of these mortgages, and on that 
day I deposited in tlie post otlice at Madison 
the letters, postpaid, directed to the creditors 
in New York. 1 gave the mortgages to Wood- 
waid to file, because it was time for me to 
go to dinner, and I thought it would make no 
difference who canied them to the clerk's of- 
fice. Woodward is the son-in-law of Harding. 
1 acted as the attorney of Harding in' draw- 
ing tlicse mortgages. In reply to his question 
asking if they must not be delivered, I told 
him it would be a sufficient delivery of the 
mortgages if he put them on file in the city 
clerk's office, and told the clerk what they 
were for, and wrote to the mortgagees; or 
that, if he chose, he might deliver them to 
me, and that I would see them filed, and notify 
the mortgagees. When he delivered the mort- 
gages to me, he said, 'I deliver them to you 
for the mortgagees,' or possibly, instead of 
the word 'mortgagees' he used 'creditors,' or 
'them'; but some word meaning the same 
thing. I saw the letter that my partner, Mr. 
Atwuod, wrote to Swift & Co. The ones that 
I wrote were substantially the same. He 
wrote two of the letters and 1 wrote two. I 
did not advise Mr. Harding that, in order to 
render the mortgages valid to the creditors, 
they must first do some act to accept them. I 
advised Harding to make a delivery of the 
mortgages, because I understood that a deliv- 
ery was essential to their validity, but I did 
not advise him to appoint me the agent of the 
mortgagees. Up to the time of delivery, I was 
acting for Harding, and the New York credit- 
ors had not employed me to act for tliem." 

George E. Woodward testified that at the 
time the mortgages were executed Mr. Haskell, 
in the presence of Mr. Harding, requested wit- 
ness to file the mortgages, and he took them 
to the city clerk's office a little after noon of 
that day, and filed them. 

Mr. Harding, being recalled by the plaintiffs, 
further testified as follows: "I delivered the 
chattel mortgages which have been introduced 
in evidence to Mr. Haskell, for the use of the 
mortgagees. I asked Haskell if it was not 
requisite to deliver them, and he said I might 
deliver them to the city clerk, or to him for 
them. Then I handed the mortgages to Has- 
kell, and said, 'I deliver these to you for the 
mortgagees.' I never have had or controlled 
the mortgages since that time, and have never 
seen them since until I saw them here." 

The defendant read in evidence a letter 
from Messrs. Collins, Atwood & Haskell to 
Swift & Co., of New York, dated December 
22d. 18.58. in which, after informing them 
that Mr. Harding had, on the 20th instant, 
executed four chattel mortgages of even 
date, on his stock, to the four New York 
firms hereinbefore mentioned, they say: "Mr. 
Harding is confident you will ratify the pro- 
ceeding, and he is now professing to act as 

GRIF. rEHS.PKOP. — 13 



your and their agent, and keeping the funds 
arising from sales apart, for the purpose of 
applying them pro rata in payment of the 
claims of the above named houses. An ac- 
ceptance of the security given, would not, of 
course, bar your right to assert your whole 
claim. We would therefore suggest that 
some action be taken by you to avail your- 
selves of the mortgage security. We have 
written a like letter to each of the above 
firms." The defendant also proved the ex- 
ecution of the chattel mortgage to Dahlman 
& Co., referred to in the answer, and also the 
several warrants of attachment, judgments, 
and ex(_cutions mentioned in the answer, and 
that he levied upon and sold the goods, etc., 
by virtue of said writs, as in the answer al- 
leged. 

After the testimony was closed, the de- 
fendant's counsel requested the court to give 
the jury the following instruction: "If the 
jury believe from the evidence that Harding 
made the mortgages read in evidence by the 
plaintiffs in the absence and without the 
knowledge or consent of the islaintiffs at the 
time of the execution thereof, and that they 
were not delivered to some of them, or some 
person authorized by the plaintiffs to act 
for them, then the plaintiffs cannot recover 
in this action, unless thej' have also proven 
that they did some act approving and rat- 
ifying the delivery of the mortgages to Jlr. 
Haskell, before the defendant made the 
levies under and by the attachment in his 
hands;" which instiaiction the court refused 
to give in terms, but did qualify the same as 
follows: "But if you find that the mortgages 
were delivered to a third person for the sole 
use and benefit of the mortgagees, then the 
assent of the mortgagees will be presumed or 
Implied, if you find that the mortgages were 
beneficial to them, and it is a sufficient de- 
livery." The defendant also asked the court 
to instruct the jury as follows: "The placing 
of the mortgages read in evidence by the 
plaintiffs in the office of the city clerk, by 
the said Harding, or his agent or attorney, 
without the knowledge of the plaintiffs, and 
without any direction or intimation to said 
clerk by Harding or his agent or attorney so 
placing tbem on file that the mortgages were 
placed on file to remain there under his 
charge for the use and benefit of the mort- 
gagees, is not such a delivery and filing of 
said mortgages as will entitle the plaintiffs 
to hold the goods mentioned therein against 
creditors attaching before the plaintiffs had 
knowledge of the making of said mortgages, 
or had I'atifled the acts of Harding or his 
said agents;" which instruction the court re- 
fused to give in terms, but qualified the same 
by adding thereto as follows: "Unless yon 
find that the mortgagor, Harding, caused the 
mortgages to be so filed with the intention of 
a full delivery of the mortgages in this way, 
and for the sole benefit of the mortgagees." 
The defendant's counsel also asked the fol 



178 



CHATTEL ilOIITGAGES. 



lowing Instructions: "If the jury believe 
that Harding was entitled to the possession 
of the goods mentioned in said mortgages at 
the time the defendant made the levy upon 
them by virtue of an attachment against the 
goods of Harding, then the plaintiffs cannot 
recover;" and: "Although the jury should be- 
lieve that the mortgages were valid between 
Harding and the plaintiffs, .vet, if Harding 
was entitled to the possession of the goods at 
the time of the levy by the defendant, then 
the defendant was authorized by the attach- 
ment in his hands to take possession of the 
goods, and hold and sell the interest of Hard- 
ing therein, and this defendant is not liable 
to the plaintiffs In tliis action," — which in- 
structions the court refused to give in terms, 
but did (lualify the same as follows: "Un- 
less you find that the plaintiffs, at the time 
of the commencement of this suit, were en- 
titled to the possession of this property, or 
were the owners thereof. In this state the 
mortgagee of chattel is entitled to the pos- 
session at any time after the execution of a 
mortgage, unless it is stipulated that the 
propertj' shall remain in the possession of 
the mortgagor." 

To the refusal uf the court to give the said 
instructions in the terms asked for, and to 
the said qualiQcations attached thereto, the 
defendant excepted. 

Tlie defendant also asked the court to in- 
struct the jury that if the plaintiffs, on the 
L'3d day of December, 1858, and before the 
levy of the attacliment by the defeudant, 
were not in possession of the goods mention- 
ed in the mortgages, they could not recover 
in this case; which instruction was refused, 
and the refusal excepted to. The court, in 
its general charge, instructed the jury as fol- 
lows: "The (juestion whetlier tlie mortgages 
were delivered to the mortgagees before the 
levy of the attachments Is one of some dif- 
ficulty. If tlicy were not delivered before 
the levy, they are of no avail In this suit. 
Tliey do not become effectual for any pur- 
pose until deliven^d. I'pon this question I 
charge you that, if you find that Harding, 
the mortgagor, executed the mortgages, and 
delivered them to Mr. Haskell with the di- 
rection to place them on lile in the city clerk's 
oftlce for the use and bcnellt of the niori- 
gagces, and that such was llie declared inten- 
tion of the mortgagor, and that they wore so 
li!<'d In the city I'li-rk's office before the levy- 
ing of the attachtiionts. It was a good and 
valid delivery of the mortgages, even though 
the niortgjigccs themselves hiid no knowUnlgc 
thereof, and had given no. direction coikthi- 
Ing sMih nKJrtgagcM until after the attach- 
iiienis In this case were levied upon the prop- 
<i ty. If you find that the niortgagcH were 
made In good faith, and were so delivered 
and filed In the city clerk's ofllce before the 
levy of the atlaclnnenlH, (he plaliitllTs .-ire en- 
titled to recover," -to the giving of which In- 
btnictlou Iht defondaul also excepted. The 



jury found a verdict in favor of the plain- 
tiffs for ^1,860, and judgment was rendered 
thereon. 

Smith. Keyes & Gay, for plaintiff in er- 
ror. Collins, Atwood & Haskell, for defend- 
ants in error. 

DIXOX. C. .T. The first question involved 
in this case, I think, was correctly decided. 
It seems to nie clear that the concurrent exe- 
cution and delivery of the two chattel mort- 
gages made the mortgagees tenants in com- 
mon of the property conveyed. The legal ef- 
fect was the same as it would have beeu if 
the goods had been mortgaged to them by 
one instrument, to be held by them as se- 
curity for their respective claims, and the pro- 
ceeds in case of a sale to be divided between 
them in proportion to the amounts thereof 
severally. If au absolute sale of a chattel 
were to be made at oue and the same time 
to two different persons, by instniments iu 
writing, purporting to convey the whole of it, 
e.xecuted and delivered to each at the same 
moment, each having a knowledge of the 
sale to the other (a transaction, perhaps, not 
likely to happen, but nevertheless not im- 
possible), I imagine that we should find little 
dilliculty in saying that the vendees thereby 
became tenants in common, each holding an 
undivided moiety of the article purchased. 
Neither having any superior right or equity, 
but both standing on au equality in tliose re- 
spects, tlie property would be divided. The 
same would be true of conveyances of real 
estate under the same circumstances. It can 
make no difference that the sales or convey- 
ances are conditional. Their elTect in this 
respect is the very same, except so far as the 
interests of the several vendees or mort- 
gagees are limited and determined by the 
amount of the demands due to each. The de- 
fendants iu error (plaintiffs below) wore, 
therefore, not only enabled, but It was incum- 
bent upon them, provided the plaintiff In er- 
ror so insisted, lo join la their action. Hill 
V. Glbbs, 5 Hill, 50. 

The second question has been detenulned 
adversely to the plaintiff In the case of Frls- 
bee V. l.angworlhy (decided at the present 
term) 11 Wis. Sir,. We there held that a 
mortgagee of personal properly, not Iu ac- 
tual po.ssesslon, might maintain replevin 
against a person taking tlio same in defiance 
of his right, where, by the terms of the mort- 
gage, he was entitled to take possession 
whenever he deemed that his Interest or the 
safety and security of the debt required. 
SiK'h was the case of the present mortgagees. 

The (piestlon which was considered by far 
the most lini)orlant, and upon which the 
counsel bestowed the most attention, citluf; 
nearly all the Kngllsh and American author- 
ities, c.'ills for the delernilnatlon, in a caao 
wher(,' a mortgage of |)ersonal property from 
a debtor to a creditor is executed In the ab- 



CHATTEL MOltTGAGES. 



17'J 



sence and without the knowledge of the lat- 
ter, and delivered to a stranger for his use 
of the time at which the title to the property 
mortgaged vests in the mortgagee, as be- 
tween him and another creditor of the mort- 
gagor who acquired an interest in it by at- 
tachment between the time of the delivery 
to the stranger and the time when the mort- 
gagee actually received notice of and accept- 
ed it. Whilst it must be admitted that there 
is some conflict in the adjudications upon 
this subject, still both natural reason and the 
weight of authority tend to the same conclu- 
sion, which is, that the title in such case only 
vests from the time there is an acceptance 
in fact on the part of the mortgagee. On 
principle, I think it may be laid down as an 
indul>itable proposition in such case that the 
title does not vest in fact until the mort- 
gagee has actually assented to the convey- 
ance; and, consequently, that until such as- 
sent it remains in the mortgagor. While all 
the courts aclcnowledge the correctness of 
principles which lead unerringly to this re- 
sult, and clearly and positively exclude any 
other, it is somewhat strange that any should 
have been found to adopt a conclusion di- 
rectly opposed to it. All agree that it is 
necessary to the validity of every deed or 
conveyance, that there be a grantee who is 
not only willing, but who does in fact, accept 
it. It is a contract, a parting with property 
on the part of the grantor, and an accept- 
ance of it by the grantee. Like every other 
contract, there must be a meeting of the 
minds of the contracting parties, the one to 
sell and convey and the other to purchase 
and receive, before the agreement is con- 
summated. If there be anything in legal 
principles, or in common sense, it is an un- 
pardonable absurdity to say that a contract 
can be completed in the absence and utter 
ignorance of one of the contracting parties; 
that he can or does, under such circum- 
stances, assent to or agree to become botind 
by it. The idea that a contract could be 
thus made, and that title to property could 
pass into a party without his knowledge or 
consent, and out of him, without any mo- 
tion or act of his signifying his willingness, 
but merely by his refusal to receive it at all, 
had its origin at a period in the history of 
I lie common law when the legal mind, in- 
stead of being governed in its conclusions by 
a steady application of the clear and rational 
I)rinciples of the law to plain matter of fact, 
and by arguments to be drawn therefrom, 
was too frequently influenced by a mysteri- 
ous and fanciful logic, that depended for its 
support tipon artfully devised fictions and 
falsehoods which for the most part were as 
i-epugnant to reason as they were unneces- 
sary to the proper administration of justice. 
The discovery that such things could be 
done is, I believe, attribtitable to the in- 
ventive skill of .Justice Ventris, as exhibited 
in the case of Thompson v. Leach. 2 Vent. 
108. decided about the year 1G90. At least 



several courts and Judges since that time, 
with many complaints, have agreed in giv- 
ing him the credit of having proved some- 
thing on this subject which none of them 
could understand. The substance of his 
proposition is that a deed of lands made to 
a party, without his Ivuowledge or consent, 
and placed in the hands of a third ijerson 
for his use, is a medium for the transmission 
of the title to the grantee, and takes effect 
so as to vest it in him the instant the deed 
is parted with by the grantor; and if the 
grantee, upon receiving knowledge of it, re- 
jects it, such rejection has the effect of re- 
vesting the title in the grantor by a species 
of remitter. Inasmuch as this is the only 
attempt at sustaining it by argument to be 
found in the books, the more recent cases 
having, without discussion, gone oJf almost 
entirely on the strength of the authorities, I 
proi^ose to examine some of the positions as- 
sumed by him, upon which his argument 
mainly depends, and from which, I think, its 
fallacy and the incorrectness of his conclu- 
sions will be clearly made to appear. He 
admits, what is universally conceded to be 
an indispensable element of every grant, 
namely, that it should be accepted by the 
grantee; and says "that an assent is not only 
a circumstance, but it is essential to all con- 
veyances, for they are contracts, actus con- 
tra actum, which necessarily suppose the as- 
sent of all parties"; but avoids the difficulty 
into which the admission of tliis well-set- 
tled principle brings him, by saying "that 
because there is a strong intendment of law 
that for a man to take an estate is for his 
benefit, and no man can be supposed to be 
unwilling to that which is for his advan- 
tage," therefore the law will presume that 
the grantee has accepted a conveyance be- 
fore a knowledge of its execution and deliv- 
ery has come to him. Upon the foundation 
of this hypothesis, misnamed by him a pre- 
sumption of law, the falsity and unreasona- 
bleness of which are so .self-evident that rea- 
soning can hardly make them plainer, he pro- 
ceeds to the erection of his superstructure. 
Assent or acceptance on the part of the gran- 
tee or other party to a deed or other instru- 
ment, by means of wliich the title to prop- 
erty, whether real or personal, is to be trans- 
ferred to him, or by which he is in any other 
manner to become bound, is a fact, the truth 
of which is to be established by competent 
evidence, before such deed or other instru- 
ment can be adjudged to have a legal exist- 
ence. Like every other fact, it may be es- 
tablished by direct evidence, or its existence 
may be inferred or presumed from other 
facts already in proof. But I deny that the 
existence of one fact is to be inferred or pre- 
sumed from the existence of others when the 
connection between the former and the latter 
is stich that, according to the course of na- 
ture, it plainly appears that the former can- 
not exist. In other words, I deny that the 
existence of any fact may be shown by 



ISO 



CHATTliL MORTGAGES. 



proving others ■which conclusively show its 
non-existence, or that the legitimate mode of 
establishing the truth of a matter is by iU' 
dubitably proving its falsehood. Justice does 
not require, nor does the law tolerate, such 
an absurdity. The learned justice says that, 
where a deed is executed by the grantor and 
delivered to a stranger for the use of the 
grantee, without the previous advice, direc- 
tion, or authority of the grantee, and with- 
out his knowledge, the law will presume that 
the grantee assents to it the moment it is de- 
livered to the stranger. Assent is an act of 
the mind,— that intelligent power in man by 
which he conceives, reasons, and judges, and 
of which it is a primary, invariable, and 
most familiar law that It cannot act with 
reference to external objects, until through 
the medium of the senses, it is impressed 
with or knows their existence. Hence, 
without such impression or knowledge, there 
can be no assent, no actus contra actum; 
and to presume it in opposition to the facts 
is to presume that which is impossible, 
which the law, the rules and precepts of 
which arc in conformity with the unchanging 
truths of nature, will never do. 

"A presumption," says Jlr. Starkie, "may 
be deliued to be an inference as to the exist- 
ence of one fact from the existence of some 
other fact, founded upon a previous experi- 
ence of their connection. To constitute such 
a presumption, It is necessary that there be 
a previous experience of the connection be- 
tween the known and inferred facts, of such 
a nature that, as soon as the existence of the 
one is establishc<l, admitted, or assumed, the 
inference as to the existence of the other im- 
mediately arises, independently of any rea- 
soning upon the subject." I'rcsuniplions 
thus deliued, he says, are either legal and 
arllliclal or natural, and may be dividtMl into 
three i^lasses: (1) Legal itrcsumptions made 
by the law itself, or prcsnniiilions of mere 
law; (2) legal ])resmiip(ions made by a jury, 
or i)rcsumptions of law and fact; (">) mere 
natural presumi)lions, or )ircsuinplions of 
mere fact. The dclinltion wliiili he so <lcar- 
ly and accunitoly gives, although applied by 
him to nil presumptions, Is perhaps more 
strictly applicable to tlio latter class. The 
assent to a deed or other Inslrumeiil by the 
grnnlec or other parly, being a mailer of 
mere fact, It Is obvious that to tlu'latterclass 
also would belong a presumption In relation 
to such assent, in a case wIkm'c such jire- 
Mumptlou could properly be Indulged. I'.ul. 
whether the prcsumiillon be assigned to the 
one or the other of these classes, the posi- 
tion of the Iciiriicd Justice Is e(iiuilly untena- 
l)le; for In no Insl.ince, not even the most 
arllliclal and iirlillr.iry, does the law Indnlgc 
In presumptions which are directly coiilr,'!- 
dlcted by the facts on which thi'y are prcill- 
caled. The known fa<'ls, though ofti'ii In 
Hiillli'lent, of their own natural force ami 
"■lllciicy. to genernte In the irdnd a conviction 
or licllif of those which jirc Inferrcrl, jirc 



always, to say the least, not inconsistent 
with or oijposed to them. If, for example, 
we take the case instanced by Mr. Starkie, 
of the presumption of the satisfaction of a 
bond after the lapse of twenty years, without 
payment of interest or other acknowledge- 
ment of its existence, while, if a single day 
less than the twenty years has elapsed, such 
presumption does not arise, we find it to be 
extremely arbitrary and technical. No natu- 
ral reason can be given why the lapse of the 
last day should operate to produce in our 
minds a conviction of belief of payment, 
while the lapse of all the days and years pre- 
ceding it does not so operate. Such is not 
its effect. But as, from common experience 
of the affairs of men, there arises in the 
mind, after tlie lapse of many years without 
payment of interest or other acknowledge- 
ment a strong probability that a debt has 
been satisfied, and as the law loves certainty 
and industriously avoids doubts, it has from 
these motives arbitrarily fixed a period of 
time at the expiration of which this proba- 
bility shall ripen into and take effect as a 
presumption of law, and at which tlie rights 
and position of the parties in reference to 
such debt, flowing from tlie mere lapse of 
time, unaccompanied by other circumstan- 
ces, shall become determinate and certain. 
This presumption which is in so many re- 
spects artificial, is in no respect inconsistent 
with the fact from which it is said to arise. 
On the contrary, though not conclnsivel.v sus- 
tained, it is strongly corroborated by the 
fact; since experience teaches that it is very 
improbable that the holder of the bond 
would, unless it were satisfied, permit such 
a space of time to elapse without receiving 
the interest or obtaining from the maker 
some other evidence of its non-payment. 
The same is true of that most purely arti- 
ficial presumption that a bond or other spe- 
cially w.is executed upon a good considera- 
tion, which Is so peremptory and absolute in 
its nature that It cannot be rebutted by evi- 
dence; whilst the consideration of another 
Instrument, executed and delivered under 
precisely the same circumslancos, and in the 
same words, btit not under seal, may hi' 
freely in(pilred Into and impeached; yet 
there the conclusion that it was made upon 
a good consideration is entirely consistent 
with the facts from which It Is drawn, for 
there Is much n^ason for supposing th;it with- 
out a good consideration It would not h;ive 
been scaled and delivered. Without nnilll 
plying illnstrallons, I thiidc It will be found 
that In no lnst;iiice (iiidess the present casi' 
Is to form an exce|)tlon) does the Law Infer 
the existence of facts In clear and direct op- 
position to those ui)on which the Inference 
rests. It iloes not do so here. Iteason re- 
bels !igalnst it, jiud neither Justice nor ei|uity 
deni.'inds It. The oidy result of <lropiiing the 
absurdity will be that, as In the i)r<'seMt 
c .'ise. In .'i ctintesl between two equ.'illy meri- 
torious [i.-irlics, the lilh' to ilie properly of 



CIIATTKL MOll'JGAGKS. 



181 



wliiili a conveyance was soufrlit to be made 
will be adjudged to be in biiu wboin reason 
designates as tbe true owner. 

The mistake of tbe learned justice con- 
sisted in bis carrying the presumption of law 
so far as to say tbat it presumes that a per- 
son has consented to tbat of which be knows 
nothing, which is an impossibility, instead of 
saying, what was more truly said by tbe 
more logical and cautious courts and judges 
of his time, and by Lord Ellenborough, in 
Stirling V. Vaugbn. 11 East. 023, namely, 
that, if nothing appears to tbe contrary, tbe 
law presumes that be will accept tbat which 
is for bis beneflt, when he is informed of it, 
which assent, in tbe absence of intervening 
rights or equities will have relation back to 
the time of delivery lor his use, and make 
bis title good as from that date. After a 
brief argument of this sort, he proceeds to 
say "that very odd consequences and incon- 
veniences would follow if suiTenders should 
be ineffectual till an express consent of the 
surrenderee," and that most disastrous ef- 
fects upon estates and conveyancing in Eng- 
land would ensue, unless her courts adopted 
and ujiheld his absurdity. It Is said that 
one eri'or surely gives rise to another and a 
greater. This saying was never more aptly 
and forcibly illustrated than by the fantastic 
feats which the learned justice makes the 
common law, tbe sober common sense of 
ages, perform by way of getting the title 
back again into the grantor in case tbe gran- 
tee refuses to accept the conveyance. He 
says tbat after, by this kind of one-sided 
contract, it has got into him without bis 
knowledge, it remains with him without his 
consent until he absolutely rejects and 
spurns the offer; and that then, by some 
magical power of tbe law, such rejection, 
without deed or other writing, becomes an 
instrument of conveyance, by which tbe le- 
gal title to land is conveyed from one who 
has it to one who has it not, against the 
expi'ess wishes of the latter, and in despite 
of bis own deed, the highest and most sol- 
emn act known to tbe law by which he 
could rid himself of it. It is not surprising 
tbat tbe learned and logical Chief Justice 
(5ibson, in Read v. Robinson, 6 Watts & S. 
329, while commenting upon what he calls 
"the masterly arguments of Justice Ventris 
in Thompson v. Leach," says that "the diffi- 
culty is to comprehend how tbe remitter can 
take effect without displacing intermediate 
interests springing from the rejected deed"; 
and then, as if in despair of ever compre- 
hending it. he dismisses the subject from his 
mind by saying. "But tbe authorities con- 
clusively prove that it may." All agree that 
neither the grantor nor the stranger who 
consents to receive and hold the deed can, 
by their acts, bind tbe grantee, and that the 
latter may, on receiving notice of it, repudi- 
ate it altogether. If the title vests in the 
grantee at once, it must, of course, vest ac- 
cording to tbe terms of the conveyance; and 



in the case of an absolute conveyance he 
would have an absolute title. If, after de- 
livery to the stranger, and before notice to 
the grantee, a creditor of the latter should 
fasten upon the proijerty by execution or at- 
tachment, no reason can be given why he 
could not bold it. If it is tbe properly of 
the grantee, it follows, as of course, that tbe 
creditor would have bis right, and tbat he 
would at once acquire a lien to the e.vtent 
of his demand. Suppose, after this is done, 
that the grantee, on receiving notice, refuses 
to accept the conveyance, what becomes of 
the property? Roes the refusal mibind and 
set the property free from tbe seizure of tbe 
creditors, and remit the title at once back 
to the grantor? Or does the intendment of 
Justice Ventris step in in liebalf of tbe cred- 
itor as well, and say, because the grant is 
presumed beneficial to the grantee, and he 
might at some future period accept it, that 
therefore he shall be deemed to have accept- 
ed it before tbe seizure, and at a time when 
he was utterly ignorant of it, and thus en- 
able the creditor to withhold tbe property 
from tbe grantor, by wbicli means it would 
happen that, although it was neither bought 
nor sold, the grantor would, without consid- 
eration, lose it, and tbe grantee enjoy tbe 
full benefit of it on the same terms? Know- 
ing of no rational or satisfactory answers 
which can be given to these and various sim- 
ilar questions which will readily suggest 
themselves to the reader, I leave them to be 
replied to by tliose wlio maintain tbat the 
title to property, real or personal, may, v.itb- 
out words written or spoken, or other act of 
transfer, be thus mysteriously passed and 
repassed between parties by contract. I 
deny tbat it may be. It seems to me verj' 
plain that it does not pass in fact until the 
grantee has actually consented to receive it, 
and as of course that it remains with the 
grantor, who is unable without such consent 
to vest it in the grantee. No other conclu- 
sion is consistent with the doctrine tbat a 
grant is a contract, and that tlie assent of: 
the grantee 'S necessary to give it validity. 
The justice assumed tbe question in contro- 
versy by saying tliat the execution and de- 
livery of tbe deed to tbe stranger passed tbe 
title out of tbe grantor, and then be was un- 
der the necessity of resorting to these fur- 
ther absurdities in order to account for it; 
for he says "that it is not a slight matter, 
but what tbe law much considers, and is 
very careful to have the freehold fixed," and 
not "under such uncertainty as a stranger 
that demands rigbt should not know where 
to fix bis action." If be had considered tbat 
the operation of tbe deed was suspended, or 
that it did not take effect until the grantee 
had assented, be would have been saved the 
trouble of drawing so largely on his imagi- 
nation to show where the title was, and how 
it was thereafter to be controlled. It is a 
matter of no small moment, and of just 
pride to the bench of England, that Justice 



182 



CHATTEL MUliTGAGES. 



Ventris, at the time he wrote this wonderful 
arjrumeut, dissented, and the other mem- 
bers of the court of common pleas, viz. Pol- 
lexfen, chief justice, and Powell and Rolveby, 
associates, were of opinion in the case "that 
there was no surrender till such time as the 
suiTcnderee had notice of the deed of surren- 
der and agreed to it," and that it was so 
adjudsed by that court; and that the ease 
was afterwards taken by writ of error to 
tlie kius's l^ench, of which Lord Holt was 
at the time chief justice, and the judsment 
of the common pleas "was there attirmed by 
the unanimous consent of the whole court." 
It was afterwards brought by error into the 
house of lords, where, as it is said, upon the 
reasons contained in Justice Ventris' argu- 
ment, the judgment pronounced in both su- 
perior courts was reversed. Thus we have 
on the one side the legal learning, and al- 
most the unanimous opinion, of the courts, 
and on the other the judgment of reversal of 
the house of lords, the great majority of 
whom Ijnew very little, and cared less, about 
the correct settlement of legal principles. 

The argument is of a piece with that kind 
of reasoning once employed to prove that 
titles to estates were "in abeyance," "in nub- 
ibus," and "in greniio legis," the folly of 
which is so thoroughly exposed and exploded 
liy the severe and searcliing logic of Mr. 
Foarne in his admirable treatise on Re- 
mainders. See pages 3(i0 to 3G4, inclusive. 
It was lield, in case of a lease to one person 
for life, remainder to the right heirs of an- 
other still living, tliat no estate remained in 
the grantor; and, because tliere was no 
heir, for the reason that no one can be heir 
during the life of his ancestor, but only after 
his <leath, and I5ecau.se tlie tenant took only 
a life estate, the remainder was said to be 
In abeyance, in the clouds, or in the Imsoin 
of the law. These opinions were founded 
upon the very same assumption as that of 
.Justice Ventris, namely, tliat the remainder 
fiassed out of the donor at tlie time of llv- 
erj', and conseiiuonlly tliat no estate re- 
mained in him tliereaftor; and, because the 
title must always be somewliere, the advo- 
cates of the doctrine sent It to tlio clouds, 
"lliough," says Mr. Feame, "by some sort 
of compromise between common sense and 
tlie supposition of an estate [lassing out of 
a man, when then; Is no person In reniin 
natura, no object beside hard and hardly In- 
telligible Words, for the rece|itlon of It at 
the lime of the livery, they are compelle<l to 
admit such n species of Interest to remain 
In the grantr>r a.s uiion the determln:ill<iii of 
the estate bcfoic the conlingent rnnalnder 
can lake place entitles the grantor, or his 
heirs, tri enter and rciSHiinie the estali>." 

The (piestlons are so closely allied, and 
the HiiliHtrala of the two follies are ho exact- 
ly alike, that Mr. I''earn<"'s reasoning Is fidly 
In point. And It Is certainly refreshing, aft- 
er a iicrplcxlng and vain cITort to undi-isl.'ind 
that which never was and never will be In- 



telligible, to take up an author, who, like 
Mr. Fearne, treats the subject upon the 
principles of common sense. He intimates a 
conviction that, instead of the title to es- 
tates being in the clouds, there is a much 
stronger probability of caput inter nubilia 
condit, of the head of the inventor of the 
fiction having been burled or hidden in 
them. He says: "I cannot but think it a 
more arduous undertaking to account for 
the operation of a feoffment or conveyance 
in annihilating an estate of inheritance or 
transferring it to the clouds, and afterward 
regenerating or recalling it at the becli of 
some contingent event, than to reconcile to 
the principles as well of common law as 
of common sense, a suspension of the com- 
plete, absolute operation of such feoffment 
or conveyance, in regard to the inheritance, 
till the intended channel for the reception 
of such inheritance conies into existence." 
The .same is true of the delivery of a deed 
to a third person for the use of the gran- 
tee, without his knowledge or previous di- 
rection. It is far more compatible with 
common law and eomnion sense to say that 
its operation is susiiriiiied until the hap- 
pening of tlie event indispensable iu the law 
to its validity, namely, an acceptance by 
the grantee, than to make the law perform 
the wonderful exploits of vesting and re- 
calling the title contrai-y to its best set- 
tled and soundest principles. I am of opin- 
ion, therefore, tliat the defendants in error 
took no interest iu tlio goods In auestion 
by virtue of their mortgages, until after 
the plaintiff in error had seized them ui»in 
process of attachment, and, conseiiuently. 
that they cannot maintain their action. 

JIucli was said in this case, about the 
manner in which the mortgjiges were de- 
livered. There can be no doubt that, so 
far as the mortgagor was concerned, the 
delivery was good. They were placed by 
him In the hands of a stranger, to be by 
him delivered to the mortgagees, and thus 
passe<l beyond his reach and control, un- 
less the mortgagees, within a rea.sonable 
time after notice, should refu.se their as- 
sent, nils made the delivery, as to the 
mortgagor, valid and binding, which Is nil 
1 understand the author of the Touchstone 
to mean, when he says that a deed "may 
lie delivered to anj- stranger for and in 
behalf and to the use of him to whom it Is 
made." Itnt a delivery by the donor to n 
third jierson, for the use of the donee, and 
an aci'eptnnce by the latter, are two very 
different things. By the former the donor 
signifies his willingness to part with flic 
properly, whilst by the latter the donee 
makes known his assent to receiving It, and 
bolii muNt cniienr lid'ore the title Is ch.in- 
ged or affected. It was formerly, and may 
p<>rliiips by some he still, supposed, that 
there can bo no delivery without at the 
snmi- time an aei'cplaTici'; that they are 
correlative, lnse|iaralilc parts of the same 



CJIATTKL M(>1;T(;A(JK.S. 



183 



transaction, and must both occui- at the 
snmu instant of time; and hence, in part, 
the fiction of relation, by which, in case 
of a delivery by the grantor to a stranger, 
the subsequent acceptance by the grantee 
was carried bacli in legal contemplation to 
the time when the grantor gave the deed 
to the stranger, in order to save the logic 
of the law and to preserve "the eternal fit- 
ness of things." It seems to mo that every 
case lu which It has been adjudged that 
there may be a delivery to a stranger, and 
that a subsequent ratitication by the gran- 
tee will make the instrument effectual for 
the purposes intended, falsifies this notion, 
and proves that in every such case there 
may be, what there is in fact, a delivery 
by the grantor at one time to a third par- 
ty, and an acceptance by the grantee from 
such third party at a subsequent and dif- 
ferent time. Such is the common sense of 
the transaction; and it is better and more 
rationally disposed of without than with 
the aid of the fiction. But if the fiction 
must be employed, then the maxim, "In 
fictione legis semper subsistit e'quitas," ap- 
plies, and it will not be allowed to operate 
when it infringes or violates the rights of 
sti-angers. It is only resorted to in fur- 
therance of justice and to prevent injury. 
In this case the plaintiff in error is a stran- 
ger to the mortgages. He represents the 
rights and interests of the creditors of the 
mortgagor, who in good faith sued out and 
levied their attachments upon the goods, 
thereby lawfully acquiring a lien upon 
them; and it cannot be said to be in fur- 
therance of justice to postpone their de- 
mands, thus legally secured, to those of the 
mortgage creditors, which are in no sense 
more equitable or just. The struggle is be- 
tween innocent persons, to prevent loss, 
and the fiction ought not to be resorted to 
for the purpose of helping one as against 
the other. The transaction must be left to 
stand upon its simple and naked truth. 

It Is unnecessary for me particularly to 
refer to the cases cited by counsel. Those 
cited for the plaintiff in error in their prin- 
ciples substantially sustain the view-s which 
I have taken. Many of those cited by the 
counsel for the defendants in error are not 
directly applicable, whilst some of them 
clearly and positively uphold the opposite 
doctrine. Of this latter character, besides 
the English, are Buft'um v. Green, 5 N. H. 
71; Wilt V. Franklin, 1 Binney, 502; and 
Merrills v. Swift, 18 Conn. 257. In the 
first it does not clearly appear whether 
notice of the execution of the deed or the 
service of the process of attachment took 
place first. Both happened on the same 
day, but the court seem to adopt the theory 
that the title vested before notice to the 
grantee, and therefore the time of the serv- 
ice of the writ, being immaterial, is not 



particularly noted. The principle upon 
which the doctrine rests is not discussed 
at all. The same is true of the case in 18 
Conn. In both it is taken for granted that 
such is the effect of a delivery to a stran- 
ger. In Wilt V. Franklin there was a dis- 
senting opinion of Justice Braekeuridge, in 
which the fallacy of the reasoning of his 
two as.sociates is so calmly and clearly 
brought out that it would be folly for me 
to do more than refer the reader to it. The 
case of Doe ex dem. Garnons v. Knight, 5 
Barn. & C. 671, 12 E. C. L. .351, was de- 
termined upon the binding authority of pre- 
vious adjudications. The question having 
hitherto remained undecided in this state, 
no such obstacle to its correct determina- 
tion exists. 

In the case of Cooper v. Jackson, 4 Wis. 
5.37, it was expressly ruled that "it is es- 
sential to the legal operation of a deed 
that the grantee named therein assents to 
receive it, and there can be no delivery with- 
out such acceptance; but such acceptance 
need not be in person; it is sulficient if au- 
thorized or approved by the grantee." In that 
case the title of the grantee was hold to be 
good as against the judgment creditor of the 
grantor upon the express ground that there 
was a previous understanding between the 
grantor and grantee that the deed should 
be executed by the grantor and delivered by 
him to the register of deeds, to be recorded. 
This, the court says, constituted the regis- 
ter the agent of the grantee for the purpose 
of receiving it. Upon this subject the fol- 
lowing language Is used: "The case at bar 
falls fully within the principle of Hedge v. 
Drew [12 Pick. 141, previously noticed, and 
commented upon in the opinion]. Here the 
grantee saw the deed after it was drawn, 
and the parties came to the understanding 
that the deed should be executed and left 
with the register to be recorded. There 
was an absolute divesting by the grantor 
of his estate in the land, and the deed was 
delivered to the register, who pro hac vice, 
may be considered the agent of the gran- 
tee to receive it. It is readily distinguish- 
able from the cases where the grantor exe- 
cutes the deed without the knowledge of 
the grantee." In the case of McCourt v. 
Myers, 8 Wis. 2,3G, there was no attempt 
by the mortgagor to deliver the chattel 
mortgage to the city clerk, or any third 
per.son, for the use and benefit of the mort- 
gagees, and consequently no question up- 
on the effect of such delivery arose. The 
only point adjudicated was that the mere 
act of the mortgagor in causing the mort- 
gage to be filed in the otHce of the clerk was 
not such a delivery as would operate to give 
the mortgagees any title or interest in the 
goods specified iu the mortgage. 

The judgment of the circuit court is re- 
versed, and a new trial awarded. 



ISl 



CHATTEL JSIOUTGAGES. 



FORBES V. PARKER. 

(16 Pick, -m-^.) 

Supreme Judicial Court of JIassachusetts. 
March Term, 1835. 

This was a case against a deputy sheriff for 
taking foity-eight swine, which had been 
mortgaged to the plaintiff by Edward A\'ulk- 
er, ou July 5, 1833, to secure the payment of 
a promissory note of the same date, payable 
in six months from that time. 

The mortgage deed, which was duly record- 
ed on the day of its date in the records of the 
town of Charlesto\vn, where the mortgagor 
then resided, contained a stipulation that, un- 
til there should be a default in the payment 
of the note after it became due, the mort- 
gagor should retain possession of the swine, 
for the pui-pose of fattening and preparing 
them for market. On the next day after the 
mortgage was executed, the defendant at- 
tached the swine, on a writ in favor of 
Nathan Tufts & Co., who were alleged to be 
creditors of the mortgagor, and sold them un- 
der such attachment, without pursuing the 
provisions of St. 1829, c. 124 (Rev. St. c. 90, 
§ 78). This attachment and sale were the 
cause of the present action. The defendant 
objected that case was not the proper form 
of action, but tliis objection was overruled. 
There was no evidence offered by the plain- 
tiff of any actual delivery of the property in 
question; and the defendant contended that 
without such evidence the action could not 
be maintained. In this stage of the cause it 
was taken from the jurj'. Upon these facts 
the court were to order a nonsuit or default, 
as law and justice should require, reserving 
to the defendant, in case of a default, the 
right of being heard on the question of dam- 
ages. 

Fletcher & Tufts, for defendant. 

PUTX.'VM, J. The question whether an ac- 
tion will lie for damiiges to a reversionary in- 
terest in personal property was settled in the 
alllrniative by the case of Ayer v. Cartlett, 
9 IMck. lOT. We have re-examined that case, 
and liave no desire to disturb the decision. 
AVilliiii n few months after it was pro- 
nounced, the legislature passed "a bill re- 
lating to mortgages and pledges of personal 
property and i)ropertj' subject to any lien 
created by law." St. 1829, c. 121. And the 
mortgage mentioned In the case at bar was 
made more than two years after the passing 
of the act. 

There Ih no Riiggestlon of any fraud In the 
cane. The plalnlllT was the mortgagee, and 
by his permission the swine nioitgagcd were 
to rciii.'ilti In the posHcsslon of the mort- 
(jngor six montljH, and until default of pay- 
ment, "for the piupDsr of fattening and pie- 
parlng tlioin for market." Now, we say In 
tlilH cH.MO, ns was said by the court In Ayer 
V. Pnrllelt. that the creditors can be In no 
iK'ili'r condlllou than tlio debtor would be In 



regard to the plaintiff. If Walker, the mort- 
gagor in possession, would have had no right 
to sell the property before the expiration of 
the time of payment of the debt, it is clear 
that his attaching creditors would not have 
any stich right. Such an act on the part of 
Walker might, according to Farrand v. 
Thompson, 5 Barn. & Aid. 826, have been 
considered as putting an end to the contract 
on his part, and a revesting of the right of 
possession in the mortgagee, so as to enable 
him to maintain trespass or trover against 
the vendee. But the proceedings against 
Walker were in invitum, and therefore the 
contract may not have been rescinded. If 
it were not, then the action of trespass upon 
the case would be the proper remedy for the 
plaintiff, the mortgagee, whose reversionary 
interest was so destroyed. 

Then it is objected for the defendant tliMt 
the plaintiff's rights ai'e to be determined as 
they existed at the commencement of his ac- 
tion, which was immediately after the mort- 
gage, and six months before his debt became 
due; that it could not then appear but that 
the moitgagor would pay the debt when it 
would become due; and that, if he did. llicu 
the plaintiff would have suffered no damage 
from the acts of the dct'cndant. The answer, 
we think, is that the plaintiff should be put 
in as .good a situation as he was in when the 
property 'vas thus taken away by the de- 
fendant. This is a special action of the case, 
and the plaintiff would have a right to be put 
into the possession of as much property as 
had been taken from him. The plaintiff 
would hold the money subject to the just 
claim of the mortgagor, or of his legal as- 
signs, for an account. That would seem to 
be the Just and ecpiitable rule of the common 
law apiiiicable to the case. But the legisla- 
ture has ))rovided, by the statute before re- 
cited, ample remedy for the creditors of the 
mortgagor. The act is predicated upon the 
conlhmation of the contract between the 
mortgagor and mortgagee. If there should 
be any benelicial interest in the former re 
maining after paying the debt, it might be 
secured by the jirocess of foreign atlaclunenf, 
or by an attachment tipon the property Itself 
subject to the Hen; In which latter case the 
court might order and decree that on pay- 
ment or tender of the debt to the mortgagee 
the property should be delivered over to the 
otilccr. 

But the dltllciilty In the case nt bar prob- 
ably was that the projierly mortgaged would 
not have been more Ihtin sulllcleni to pay 
the debt, and therefore no benellt would have 
arisen from the trustee i)rocess, or tli.'it there 
was no benctii'ial Interest in the mortgagor to 
arise from keeping and fattening the swine 
In the six months during which the mort- 
gagor was to possess them. If the contract 
were faithfully in'rfornied by the mortgagor, 
the property mortgaged would be nmcli In- 
creased In value; and If It were made snlll- 
cli'Mt to pay the debt when due, the mort- 



CHATTEL MORTGAGES. 



185 



gagor would have had recompense for liis 
expense, care, and labor; if more, the mort- 
gagor would have the excess. But a creditor 
of the mortgagor, who had attached the prop- 
erty, and substituted himself ia the place of 
the mortgagor, might, for aught that appears, 
have been at great expense, and the benefit 
would have accrued to the mortgagee, if, after 
all, there had not been a surplus. Be these 
conjectures as they may, the remedy for the 
creditor of the mortgagor pointed out by St. 
1829, c. 124, should have been pursued. He 
should either have summoned the mortgagee 
upon the trustee process, according to the 
first section, or attached the property subject 
to the lien created by the mortgage, accord- 
ing to the second section, which provides 
"that the person for whose benefit the same 
attachment is made or execution levied, shall 
first pay or tender to the mortgagee, pledgee 
or holder, the full amount of the demand for 
which the said property is mortgaged, pledged 
or subject to any hen as aforesaid." But in- 
stead of this, the creditor of the mortgagor 
has adopted a course which deprives the 



mortgagee of all benefits from his morUjage. 
He has caused the property to be attached 
and sold for his own security or payment, 
without making any provision for the pay- 
ment of the debt due to the plaintiff, the 
mortgagee. We all think that it is not for 
such an attaching creditor of the mortgagor 
thus to disturb and usurp the rights of the 
mortgagee. And we think that the mort- 
gagee has a right to recover damages pres- 
ently for the value of the property, not ex- 
ceeding, however, the amount of his just 
claim against the mortgagor, with all the 
damages sustained in the vindication of his 
rights. 

The objection that there was no actual de- 
livery cannot be maintained, as the recording 
of the mortgage deed in the records of the 
town of Charlestown, where the mortgagor 
resided, was legally equivalent to an actual 
delivery. That point has been recently de- 
termined in the caso of Bullock v. Williams, 
16 Pick. 33. Therefore, according to the case 
reported, the defendant is to be defaulted, 
and the damages assessed by the jury. 



1S6 



CHATTEL MOUTGAGES. 



DORSEY v. HALL et al. 

(7 Neb. 4(50.) 

Supreme Court of Nebraska. July Term. 187S. 

This case came up from Cumins county. 
Heard there upon a demurrer to the petition 
before Valentine, J. Demurrer sustained, 
and cause dismissed. Plaintiff appeals. 

Uriah Bruner and K. F. Stevenson, for ap- 
pellant. Crawford & McLaughlin, for ap- 
pellees. 

MAXWELL, C. X On the 1st day of 
May, 1S77, the plaintiff commenced an action 
in the district court of Cuming county to 
foreclose a certain mortgage e.xecuted by 
Robert Hall. Kate H. Hall, his wife, and 
David H. Winyall and Lina D. Winyall, his 
wife, to Thomas Wilson, on the 4th day of 
October, 1875, upon the N. W. 14 of section 
14, in township 23, range 5 E.: and also up- 
on parts of lots 13, 14, 15, 16, and 17, in 
block 30, in the city of West Point,— to secure 
the payment of the sum of ?1,950, according 
to the tenor of three promissory notes ac- 
companying said mortgage, the last of which 
notes, calling for the sum of .$1,200, was due 
and payable on the 1st day of April, 1877, 
which note was duly assigned by the said 
Wilson to the plaintiff, who brought this ac- 
tion thereon. 

The petition alleges that in the year 1873 
.John D. Neligh sold to Thomas Wilson lots 
1:!. 14, 15, IG, and 17, in block 30, in the city 
of West Point, and that in pursuance of 
said contract of purchase said Wilson, on or 
about the 1st day of September, 1873, took 
possession of said lots, and erected thereon 
a large livery and feed stable; that under 
the contract Noligb was to hold tlie legal ti- 
tle to said i)rcraises in trust for said Wilson, 
until said Wilson or bis assigns should re- 
quest a deed for said premises. It is also 
alleged that on the 1st day of October, 1875, 
Wilson sold the premises in (piosliou to Rob- 
ert Hall and David H. AVinyall. and took the 
mortgage In (luestion from said parties; said 
Neligh Btlll continuing to hold the legal title 
to said lots. On the 2(;th day of Atigust. 
187(i, Hall sold bis interest in said premises 
to James Gallen, who had actual notice of 
the existence of the mortgage; and on the 
same day Nellgb and wife, in pursuance of 
the contract with Wilson, executcil and de- 
livered to Winyall and Gallen a warr.uily 
deed for said picinlses. 

The petition further alleges that on the 
Kith day of December, 187(1, (inlleii and wife 
conveyed the undivided half of said prem- 
iBCH to one George Gullen, with a view to 
defraud Hall and Wilson out of llielr Just 
rights, and tluit on the lOlb day of February, 
1877, the said Ci-orgc (Jalleii conveyed by 
deed the undivided half of said premises to 
the wife of .lami'S il.'illen. It Is also alleged 
that certain defendnnlH recovered Judgments 
ngniiiHt .Nellgb after the Ist day of Seplein 
bcr, 187.'}. The tenth paragiapb of the pe- 



tition was stricken out on motion of the de, 
fendants as being redundant and irrelevant. 
The paragraph is as follows: "That said 
Robert T. Hall and David H. Winyall were 
the owners of said lots 13. 14, 15, 16. and 
17, In the city of West Point, on the 4th 
day of October, 1876, as fully as if the le- 
gal title thereto had been in their names; 
and as such owners had the right to and 
were legally entitled to convey the same to 
the said Thomas Wilson by mortgage deed 
at that time, and incumber the same in all 
respects as if they held the legal title in 
their names; and that the said James Gallen 
and his assigns, the said George Gallen and 
Katie Gallen, have and hold the same sub- 
ject to and with full knowledge of said mort- 
gage." 

It is ditiicult to perceive upon what grounds 
the motion was sustained. If it is urged 
that the averments are mere conclusions of 
law, still where a legal deduction or con- 
clusion of law contains a fact constituting a 
cause of action, or one which is essential 
to enable the plaintiff to maintain bis action, 
the proper motion is to make definite and 
cerlaiu, and not to strike out. As the de- 
fendants deny the validity of the mortgage, 
the plaintiff projicrly sets forth in his peti- 
tion the authority of the mortgagors to exe- 
cute the same. The court therefore errc<l 
in sustaining the motion. 

After the motion, striking out the tenth 
paragraph of the petition, had been stistain- 
ed, the defendants demurred to the petition 
upon the ground that it stated no cause of 
action. The demurrer was sustained, and 
the cause dismissed. The case Is brought 
into this court by api)eal. 

In support of the judgment of the court be- 
low It was urged by defendants' counsel on 
the argument of the case that the trust 
created by the contract between Wilson 
and Neligh was absolutely void, and that, 
therefore, the plaintilf acquired no lien by 
bis mortgage, and therefore the petition 
stated no cause of action. The petition, 
however, Includes the N. W. Vi of section 
14, township 23 N., of range 5 E., which is 
not In dls))ute, and upon which. If the facts 
stated In the petition are true, the plalnlifi' 
Is enlilled to a decree of foreclosure. This 
dls|)osos of the c:ise, but, inasmuch as the 
question of the vulldity of the mortgage 
ujjon the lots heretofore described will 
again come before the district court, we 
have tbongbt It best to review that branch 
of I he case. 

It Is a well-established principle of e(]uity 
that, where a contract Is made for the sale 
of re.'il estate. It considers the vendor as a 
trustee of the pni'<'ba8er for the estate sobl. 
and the purchaser as u trustee of the pur- 
chase money for the ven<l(U\ Malin v. Ma- 
llii. I Wend. (')25; Champion v. Hrown, li 
.lobns. Cb. 402; Wnlson v, Le How, (> Harb. 
481; Wlllard, Eq. 010. And the trust In 
such case atlaibcH to the liuiil, and binds 



CHATTEL MUKTGAGKS 



187 



the heirs of the vendor. Seton v. Slade, 7 
Ves. 2G4; Swartwout v. Burr, 1 Barb. 495; 
Sutphen v. Fowler, 9 Paige, 280. And a 
subsequent purchaser from either the ven- 
dor or vendee, with notice, becomes sub- 
.lect to the same equities as the party would 
be from whom he purchased. Trinnere v. 
Bayne, 9 Ves. 209; Macki-eth v. Symmons, 
15 Ves. 329; PoUenfax v. Moore, 1 Atk. 
573; Green v. Smith, 1 Atk. 572; Davie v. 
Beardsham, 1 Ch. Gas. 38; Champion v. Brown, 
C Johns. Ch. 403; Seaman v. Van Rensselaer, 
10 Barb. 83; Story, Eq. 789. 

In the absence of a contract, therefore, if 
the allegations of the petition are true, Ne- 
ligh became a trustee for Wilson, or his as- 
signs, of the lots in question. He has ad- 
mitted the validity of the trust by carrying 
the same into effect, and it may be ques- 
tionable if any of these defendants are in 
a position to deny Its validity. The convey- 
ance to James Gallen was made in pursu- 
ance of the terms of the agreement, and 
after the execution and recording of the 
mortgage. As to tjie judgment creditors. 
It is well settled In this court that the lien 
of a judgment upon real estate is subject to 
all prior liens, either legal or equitable. 



Metz V. Bank. 7 Neb. 10"; Colt v. Du Bois. 
Id. 391. If, therefore, there was an actual 
sale of the lots in question to Wilson, al- 
though the legal title remained in Neligh at 
the time the judgments were recovered, yet 
the lien attached only to the unpaid pur- 
chase money, if any. Filley v. Duncan, 1 
Neb. 134; Uhl v. May, 5 Neb. 157. 

As to the authority to mortgage the prop- 
erty in question, it is sufficient to say that 
all kinds of property, real or personal, whieli 
are capable of absolute sale, may be mort- 
gaged. 2 Story, Bq. Jur. § 1021; 4 Kent, 
Comm. 144; 1 Pow. Mortg. 17-23; 2 Bouv. 
Diet. 198. 

As Hall and Winyall were in possession 
of the lots in question as owners thereof, at 
the time of the execution of the mortgage, 
they had unquestionable authority to exe- 
cute the same; and if there is a defect in 
the description of the lots it may be cor- 
rected to confoi-m to the actual intention of 
the parties. Galway v. Malchow, 7 Neb. 
2S.J. 

For the errors herein refeired to the judg- 
ment of the district court is reversed, and 
the cause remanded for further proceedings. 
Reversed and remanded. 



1«3 



CHATTEL -MORTGAGES. 



THRASH et al. v. BENNETT. 

(57 Ala- 156.) 

Supreme Court of Alabama. Dec. Term, 1876. 

Appeal from circuit court, Dallas county; 
George H. Craig, Judge. 

Action of ti'over by Armistead Bennett 
again.st Tbrasb, Day, and Cochran, for tbe con- 
vereion of 4,71-t poiuids of seed cotton upon 
wbicb plaintiff claimed a mortgage. Tbe de- 
fendants bad seized the cotton under what is 
called in the record a search warrant. Tbe 
court cliarged tbe jury that tbe search warrant 
was void; and if Tbrasb took cotton on which 
Bennett bad a mortgage, and the other de- 
fendants aided bim in it, by going on his bond, 
and having tbe cotton sold by Bardie & Rob- 
inson, etc., plaintiff would be entitled to re- 
cover of all the defendants. The defendants 
then requested the following charges in writ- 
ing: "(1) If the jury believe from tbe evi- 
dence that the cotton alleged to have been 
taken by tbe defendant was raised by Dennis 
Cochran, upon tbe land rented from the plain- 
tiffbysaid Dennis fortbeyear,audas plaintiff's 
tenant, then the plaintiff had a landlord's lien 
on said cotton, and had no such interest or 
property in said cotton as would authorize bim 
to recover in this action, and the jury must 
find for tbe defendant. (2) If the jury believe 
from tbe evidence that tbe substance of the 
contract between Cochran and plaintiff was 
that plaintiff was to furuisli Cochran with 
land, and a mule, and supplies while cul- 
tivating said land, and that said Dennis 
agreed to give the plaintiff one bale of cotton, 
and such other jxirtion of sucb crops as would 
be sullicient to pay for said supplies, then the 
plaintiff has no such interest in tbe cotton 
alleged to have been taken from Cochran as 
will authorize bim to maintain this suit. (3) 
If the jury believe from the evidence that any 
portion of the cotton belonging to the defend- 
ant had been by the owner or by tbe plain- 
tiff willfully mi.xcd with the cotton alleged to 
have been taken by defendant, without the 
knowledge, fault, or consent of defendant, so 
that the cotton belonging to tbe defendant 
could not be separated from tbe cotton alleged 
to have been taken bj" the defendant, and that 
said cotton, so mixed, is herein sued for, then 
the jury cannot liiid for the plaintiff. (-1) If 
the Jury believe from tbe evblence that the 
cotton alleged to have been taken by defend- 
ant was taken under and by virtue of a search 
Wiirrnnt, Issued In accordance wllli law, by an 
olllccr duly iiuiliorlzed to Issue tbe same, and 
executed by an olllcer duly authorized to do 
80 by seizing said cotton, iind that the cotlon 
HO seized Is that a1!i .mmI to have been taken by 
defendant In thib ai tlon, and that said cotton 
was rarrlc'il before the olllcer Issuing s)il(l 
scnrcli wariiint, ami that sold olllcer or mag- 
istrate Ims never disposed of said jiroperly by 
trial, then tbe plaintiff cannot recover In this 
action." The court refii.sed to give either of 
tlirse clinrgcH, iiiul the <lifcMdnnls duly except- 
imI. There was a verdict and Judgment for 



plaintiff, from which tbe defendants appeal. 
The other facts sufficiently appear from tbe 
opinion. 

Reid & May, for appellants. Pettus, Daw- 
son & Tillman, contra. 

STONE. J. We propose to consider only 
the questions raised by tbe assignments of 
error. There was certainly no error in exclud 
ing from tbe jury evidence that 12 of the 
persons composing tbe grand jury at a cer- 
tain term were colored men or freedmen. 
Sucb testimony could have shed no legitimate 
light on any question raised by this record. 
The controlling matter of contest was wheth- 
er the cotton belonged to Bennett, the plain 
tiff, or Thrash, one of the defendants. The 
tendency of the testimony offered would 
have been to multiply the issues unduly, and 
to confuse the jury in their deliberations. 
The whole action of the grand jury, first and 
second, presented questions foreign from the 
issues being tried, and, if objected to. should 
have been excluded. Governor v. Campbell. 
17 Ala. 566; 1 Brick. Dig. p. 80!», § 81; Mo- 
bile Marine Dock, etc., v. McMillan, 31 Ala, 
Til; Crews v. Tbreadgill, 35 Ala. 341. 

There is no exception reserved to the af- 
firmative charge given which justifies us in 
considering it. Gager v. Gordon, '2d Ala. 341. 
To authorize the reversal of a cause on ac- 
count of charges asked and refused, the 
charge asked must assert a correct legal 
proi)osition in view of the evidence before 
the jury; must not be abstract, ambiguous, 
or calculated to mislead; and must be true 
and consistent with flie evidence in all its 
postulates of law and fact. If it be wanting 
in any one of these particulars, it Is the 
privilege, if not the duty, of tbe court to re- 
fuse it. 1 Brick. Dig. pp. :r.S. XV.). §S 41. 4S, 
59-61, 65; McLemore v. Nuckolls, 37 Ala. 675. 

Among tbe questions raised by the charges 
asked is the legality of what is called in the 
record !i search warrant. The grounds on 
which such warrant may be issued, and the 
manner of suing it out, are shown in Uev. 
Code, § 4377, and sections following. Section 
4377 <leclares on what grotmds a search war- 
rant may bo Issued. An examination of the 
allldavit and warrant of search will show 
that tJjey charge no criminal offence, and siiec- 
Ify none of I he groiuids mentioned In the 
staluto. Seel Ion 4;!7.S declares that such 
search warrant "can only be Issued on proba- 
ble (■;iuse, supported by allidavit. naming or 
describing the person, and particularly de- 
scribing tbe i)r()i)erly and place to be search- 
ed." Sections i;'i7!), 4.'iS<), declare what pre- 
liminary proof shall be made; and section 
4.381 gives dlreilions for tbe issue of the 
warrant. The allldavit and wsirrant In tbe 
present record are so manifestly Imperfect 
that we deem It uiiTiecessary to specify the 
Imperfections. They are void. Duckworth 
V. .lolinson, 7 Ala. 578; Sullivan v. Kobin- 
Hon. 3!) Aln. <'>13. 

Two witnesses examined In Ibis cause tes- 



CHATTEL MOllTGAGES. 



189 



tlfy that Dennis Cochran rented land from 
Bennett, the plaintiff, and became his ten- 
ant. They also testify that Cochran exe- 
cuted a mortgage to Bennett on his crop to 
be grown, to secure the agreed rent, the hire 
of the mule, and for advances to be made 
by Bennett; and that the last two items re- 
mained unpaid when the present action was 
brought. There was no objection or excep- 
tion to this evidence, and we are not in- 
formed whether the mortgage was in writ- 
ing or was oral. A mortgage of chattels, 
however, is good in either form. Morrow v. 
Turney, 35 Ala. 131. And a mortgage on a 
crop to be grown is good; and, when pro- 
duced, the mortgagee is entitjed to the pos- 
session, and may maintain an action for its 
recovery. 2 Brick. Dig. p. 245, §§ 9, 11; Doe 
V. McLosky, 1 Ala. 70S; Knox v. Easton, 38 
Ala. 345; Mansony v. Bank, 4 Ala. 735; Book- 
er V. Jones, 55 Ala. 266. 

The first charge asked entirely ignored the 
question of mortgage, and was rightly re- 
fused on that account. True, if only the re- 
lation of landlord and tenant had existed, 
the charge would have asserted a correct le- 
gal proposition. But the charge withdrew 



from the consideration of the Jury all the 
testimony tending to prove a mortgage. 

If the word "substance," In the second 
charge, be emphasized or if it had said, if 
the jury believed there was no other contract 
than the one supposed in the charge, then, on 
a technical criticism, the charge might be 
pronounced correct, as far as it goes. But 
it, like the first, ignores the proof of mort- 
gage. Its tendency was to mislead, and the 
court did not err in refusing it. 

The third charge contains a singular re- 
pugnancy. Its language is: "If the jury 
believe from the evidence that any portion 
of the cotton belonging to the defendant 
[Thrash] had been by the owner [Thrash] or 
by the plaintiff [Bennett] willfully mixed 
with the cotton alleged to have been taken by 
the defendant," etc. It is manifest that if 
the cotton was mixed, and the confusion pro- 
duced by Thrash, this could not defeat Ben- 
nett's suit. This charge was correctly re- 
fused on this ground, if for no other. 

In declaring the search warrant void, we 
have, in effect, said the fourth charge should 
not have been given. It was abstract. Af- 
firmed. 



190 



cnATTEL MOllTGAGES. 



JOXES V. RICHARDSON. 

(10 Mete. 4ol.) 

Supreme Judicial Court of Massachusetts. 
Oct. Term, 1846. 

Assumpsit on the receipt and promise set 
forth in the award hereinafter stated. The 
action was referred to an arbitrator, under 
a rule of cotu-t which contained this provi- 
sion: "He shall, at the request of either par- 
ty, state in explicit terms, upon the face of 
his award, the exact evidence and facts in 
respect whereof either of the said parties 
shall think fit to state or raise any le^al ob- 
jection or question, whether upon the admis- 
sibility or competency of any evidence or 
witness, or upon any question of law. The 
case is to be heard and determined upon the 
principles which should govern a coiu't and 
jury." The arbitrator's award was as fol- 
lows: 

"The subscriber, named as referee in the 
fore.iroiui; rule, met the parties thereto, by 
their counsel, on the 3d of July, 1843, at Bos 
ton. The plaintiff gave in evidence, to sup- 
port the demand made by him on the defend- 
ant, the following written instrument: 

" 'Xorfolk— ss. : Sept. 9th, 1842. Received of 
Xatlian Jones, deputy sheriff for the county of 
Norfolk, the porsdual property coutaincU in 
the sclicdule hereafler written, which were 
this day attached by said Jones as the prop 
eriy of Addison Richardson, at the suit of 
E. Wusson, Henry Peirce, Rufus Clements, 
and on several other writs vs. said Richard 
son and others; the writs being returnable 
at the next court of common pleas at Boston, 
in the county of Suffolk, on the first Tuesday 
of October next; and having received of said 
Jones one dollar in full for my services, I 
do promise to keep said goods safely, and de- 
liver the same to said Jones, in good order, 
on demand. 

" •.Schedule. The whole of the remainder 
of said Uich.'inlsnn's stock in trailo now In 
said Lewis Richardson's house, consisting of 
broadcloths. oiIht wonllcii ;.'oo(ls. c(illon 
goods, crockery ware, hardware, silk goods, 
and all other goods of every description, 
which were removed to my place by sai<l 
Addison Rlclianlsou. Said goods are coulain. 
otl In several boxes, except the crockery ware, 
estimated at the value of nriecn hundred dol- 
lars, lycwls Richardson.' 

"The plaintiff also gave evidence, and It 
was adniltlcd by the defendant, that ho de- 
iiiaudcHl a delivery by tin? defendnni of tlio 
above-mentioned goods, in the month of 
June, ISl.'J. an<l that llie dcfcniliint refused 
to deliver tlicm. Tlio defiMulatit nlTcreil to 
prove, mill the plaintiff ndmillcsl, that when 
the ncllon which In the Hubjecl of this rcf- 
cri'uco was coMimen<i'(l, the muUh on which 
said goods were ntlachcd were not disposed 
■ if, bill were pending In court; and the de- 
fendant thereupon objected that this action 
was prematurely bruuKht and could not be 



maintained. The subscriber deemed this ob- 
jection groimdless. 

"The defendant then gave in evidence the 
following mortgage to him. which was re- 
corded by the clerk of the town of Medway. 
on the 7th of September, 1842: 'Know all 
men by these presents, that I, Addison Rich- 
ardson, of Medway, in the county of Nor. 
folk, and commonwealth of Massachusetts, 
in consideration of two thousand dollars, to 
me in hand paid by Lewis Richardson, of 
said Sledway, the receipt whereof is hereby 
acknowledged, do hereby bargain and sell 
unto the said Lewis the following personal 
property, viz. the whole stock in trade of 
said Addison, as well as each and every arti- 
cle of merchandize which the said Addison 
this day bought of Timothy Walker, being 
in a store formerly kept by said Walker in 
said Medway, as every other article consti- 
tuting the said Addison's stock in trade, in 
the shape the same is and may become in 
the usual course of the said Addison's trade 
and business as a trader. To have and to 
hold the same to the said I^wis, as his own 
proper goods and chattels. The condition of 
the above sale is this: If the said Addison 
pay the said Lewis a note of hand, this day 
given by him, for two thousand dollars, and 
interest thereon, then this shall be void; oth- 
erwise to remain in full force. In witness 
whereof I, the said Addison, have set iny 
hand and seal this seventh day of October, 
A. D. 1840. Addison Richardson. [Seal.]' 

"It was stated by the plaintiff and admit- 
ted by the defendant that the goods whicli 
are the subject of this reference were for- 
merly the stock in trade of said Addison Rich- 
ardson, but that only a part of them was 
owned by him until after he made said mort- 
gage. 

"The plaintiff did not deny that the note of 
iwo thousand dollars mentidiicd in said nioi't 
gage was justly due from said Addison to the 
said Lewis, .and was wholly unpaid. But the 
plaiiililT insisted that said mortgage was, on 
the face of It, fraudulent, and wholly void as 
against other creditors of .said Ad<iisoii. or, 
if not wholly void, that it was void as to all 
the goods which were not a part of siild Ad- 
dison's stock ill trade when tlic nmrlgage 
was executed. The defendant thereupon of- 
fered to introduce evidence that he had tak- 
en possession of all Ihc goods which are the 
subject of this reference, before they were 
attached by the plaintiff, for the purpose of 
foreclosing the moitgage. But the subscrib- 
er, deeming such evidence Irrelevant, refused 
to ri'celve It. He also was of opInUui that 
the mortgage was valid as to all the goods 
which were attached by the plaintiff. 'I'he 
defendjint then proposed to give evidence 
that the true value of the goods which were 
attached was much less than tlftccn hundred 
dollars: but the subscriber. bi'Ing of opinion 
that the defcMidaiil w;ih aimwerable to the 
plalntllT, it' at all, for the sinii at wlilrli the 



CHATTEL MOIITGAGES. 



191 



fcoods were osti mated in tho defouflant's re- 
ceipt, refused to receive such evidence. 

•■The defendant next insisted that by the 
true construction of the defendant's receipt, 
taken in connection with said mortgage, the 
plaintiff attached only so much of the mort- 
gaped property as should be found to re- 
main after payment therefrom of the debt 
for which it was mortgaged, to wit, the 
mortgagor's right in equity to redeem said 
propeity. But the subscriber was of opin- 
ion that the plaintiff neither did nor could 
make such attachment, and that the whole 
property in said goods was attached by him, 
and was included In the receipt given to him 
by the defendant. 

"The defendant then gave in evidence a 
written demand delivered by him to the 
plaintiff, after said attachment was made and 
said receipt given, but on the same day. of 
the following teuor: 'Be it known to you 
that I, the subscriber, have a mortgage on 
the goods and property which Addison Rich- 
ard.son has put in my keeping, to the amount 
ijf two thousand dollais and interest. I 
hereby demand the same sum of you, to be 
paid within the time specified by law, as you 
liave attached said property. Lewis Rich- 
ardson. September 9th, 1842.' 

"It was admitted by the plaintiff that he 
liad paid nothing to the defendant after said 
demand; but he denied that said demand, 
and his omission to pay anything to the de- 
fendant, were sufficient in law to dissolve 
the attachment. The subscriber was of 
opinion that the defendant was entitled by 
law to defend this action under his mortgage, 
and that the said demand made on the plain- 
tiff by the defendant was good and suffi- 
cient, at least for tbe sum of two thousand 
dollars, which exceeds the value of the 
goods attached, as estimated by the parties. 
The subscriber, therefore, on the foregoing 
statement, is of opinion, and accordingly 
awards, subject to the opinion of the court 
to which this award is returnable, that the 
plaintiff has no cause of action against the 
defendant, and that the defendant recover 
of the plaintiff costs of court, to be taxed by 
the coiu-t, and also the costs of reference. 
"Theron Metcalf." 

G. M. Brown, for plaintiff. Richardson & 
Lovering, for defendant 

WILDE, J. This case, at a former term, 
was referred to the determination of an ar- 
bitrator, who was required, at the request 
of either party, to state the evidence and 
facts in respect whereof either of the parties 
shciuld think fit to raise any legal question, 
lu pursuance of this reference, a hearing of 
the parties has been had before the arbitra- 
tor, and the case comes before us on his re- 
port. 

At the hearing, it appeared in evidence 
that the plaintiff claimed the property in 



question l»tween the parties by virtue of an 
attachment tliereof a.s the property of one 
Addison Richardson, and that the defendant 
claimed the same under .i mortgage to him 
from the said Addison, made and recorded 
before the said attachment; and the principal 
question submitted to tlie court by the arbi- 
trator is whether the said mortgage is valid 
against the creditors of the mortgagor. The 
property mortgaged is thus described in the 
deed: "The whole stock in trade of said Ad- 
dison, as well as each and eveiy article of 
merchandize which the said Addison this 
day bought of Timothy Walker, as every 
other article constituting the said Addison's 
stock in trade, in the shape the same is and 
may become in the usual c-ourse of the said 
Addison's trade and business as a trader." 
And it was admitted that the goods in ques- 
tion were, at the time of the attachment, the 
stock in ti'ade of the said Addison, but that 
only a part of them was owned by him un- 
til after he made the said mortgage. It has 
been contended by the plaintiff's counsel 
that the mortgage was in law fraudulent and 
void against bona fide attaching creditors; 
or, if not wholly void, that it was void as to 
all the goods which were not a part of the 
mortgagor's stock in trade when the mort- 
gage was executed. There seems to us to be 
no ground for the argument that this mort- 
gage was wholly void, as being fraudulent on 
the face of it, or as having* been made with 
an intent to defraud the creditors of the mort- 
gagor. It was not denied that the mortgage 
was given to secure a large debt due from the 
mortgagor to the mortgagee; and no evi- 
dence was introduced at the hearing tending 
to prove that the mortgage was not made 
bona fide. The question, therefore, is re- 
duced to this, namely: whether the defend- 
ant has acquired any v;Uid title, under the 
mortgage, to the goods purchased by the 
mortgagor subsequently to the mortgage 

That a person cannot grant or mortgage 
property of which he is not possessed, and to 
which he has no title, is a maxim of the law 
too plain to need illustration, and which is 
fully supported by all the authoritit's. Ter- 
kins, § 65. says, it is a common learning in the 
law that a man cannot grant or charge that 
which he hath not. Bac. Abr. "Grants," D, 2; 
Com. Dig. "Grant," D. It is true that a per- 
son may grant pereonal property of which he 
is potentially, though not actually, possessed. 
A man may therefore grant all the wool that 
shall grow on the sheep which he owns at the 
time of the grant, but not the wool which shall 
grow on sheep not his, but which he after- 
wards may buy. So a parson of a church may 
grant his tithes for years, for, although they 
are not actually in him at the time, yet they 
are potentially; and the same exception to the 
general rule extends to giants of crops grow- 
ing on lands of the grantors at the time of the 
grants. Lunn v. Thornton. 1 Man.. G. & S. 
oS3, and the authorities there cited. Not deny- 



192 



CHATTEL MORTGAGES. 



ing these principles, tlie defendant's counsel 
contend tliat, altbongli the mortgagor could 
not convey or create a charge on property to 
wliicU he had no title nor possession, actual or 
potential, yet when he, after the mortgage, 
added to his stock in trade by new purchases, 
the property vested immediately in the mort- 
gagee, without any other act or conveyance 
on the part of the mortgagor, by virtue of the 
previous agreement to that effect contained in 
the mortgage deed. One of the cases cited in 
support of this argument is Mitchell v. Wins- 
low, 2 Story, 6o0, Fed. Cas. No. 9,C73. But 
that case was decided on principles of equity, 
and on the construction of the United States 
bankrupt act of 1S41 (chapter 9), on which 
it was held "that (except in cases of fraud) 
assignees in bankruptcy take only such rights 
and interests as the bankrupt himself had, and 
could himself claim and assert at the time of 
his bankruptcy; and consequently that they 
are affected with all the equities which would 
affect the bankrupt himself, if he were as- 
serting tliose rights and interests." "It is ma- 
terial here to state," says the learned judge, 
in giving his opinion, "that the present is not 
a controversy between a first and second mort- 
gagee as to property acquired and in esse after 
the execution of the lirst mortgage, and before 
the execution of the second mortgage, both the 
mortgagees being purchasers for a valuable 
consideration. That might at law present a 
very different question." The decision, there- 
fore, in that case, is of no authority in favor 
of the defendant in the present case, but seems 
rather to be an authority impliedly in favor of 
the plaintiff, who claims under an atlachment 
by a bona fide creditor of Addison lUcliardson, 
the mortgagor. The same remark may be 
made as to the case of Fletcher v. Morey, 2 
Story, 5r>5, Fed. Cas. No. 4,SG4. That was a 
case in equity, in which the plaintiffs relied on 
nn equitable lien on certain shipments, and 
the proceeds thereof, in the hands of the de- 
fendant, the assignee of .lames Head & Co., as 
collateral security for advances made to tlx-m 
by the plaintitfs. And this Hen was adjutlgcd 
valid, as an e(iuitablc charge on tlie property, 
constituting a trust But these decisions have 
but little bearing on the question under con- 
sideration. Many things are held by court.s of 
equity to be assignable which are not so held 
by courts of liiw. So the legal distinctions 
between executory and executed contract.s are, 
in many cases, disregarded by courts of equity. 
I'.ut the present case Is to be decided accord- 
ing lo the ))rlnclplcs of the couunon law. The 
((uestlon Is, what arc the legal rights of the 
rmpwtlvo parties to the property In (lucstion? 
One of the principal cases relied on by the 
defendant Is that of Macoinbcr v. rnrker, 11 
I'lck. ID". In that case It nppearc<l that Ihuit- 
Ing & Ijiwrence were IcKsees of a brickyiird. 
and entered Into a contrjict with .loseph lOvans, 
by which he was to make for them n certain 
number of brlckH on certain tenns. and to 
Hhare the profit or loss between them, one-half 



each; Evans agreeing that Hunting & Law- 
rence should have full power to retain Evans' 
part of the bricks or money, to the amoimt of 
all sums of money due or which might become 
due from him to them. Hunting & Lawrence 
afterwards assigned to the plaintiffs all their 
property, including the brickyard, and their 
rights under the contract with Evans, to which 
Evans assented, and agreed to act as agent for 
the assignees. This unquestionably was a 
good assignmeut, upon the principles already 
stated. Hunting & Lawrence not only had a 
potential possession, but they owned the clay 
of which the bricks were to be made, subject 
only to the right which Evans might after- 
wards acquire by his contract. The transmu- 
tation of the clay into bricks did not change 
the right of property; so that Evans could not 
acquire an absolute legal title to his share of 
tlie bricks uutil he paid the balance due to the 
plaintiffs. Upon this view of the case, the 
question as to the right which might be ac- 
(luirod by pledging or hypothecation of prop- 
erty was not material to the decision of the 
case. But, if it were otherwise, the doctrine 
laid down by the learned judge who delivered 
the opinion of the court in that case is not ap- 
plicable to the present case. For if, when a 
party agrees to pletlge property afterwards to 
be acquired, and, when it is acquired, delivers 
over the same to the pledgee, the right of the 
pledgee would then attach, it does not follow 
that tlie same doctrine would apply to a mort- 
gage sale. A mortgage is an executed con- 
tract; and it is clear that nothing passed by 
the mortgage deed in this case besides the 
stock in trade which the mortgagor had at the 
time the mortgage was executed. But in .\b- 
bott V. Goodwin, 20 Me. -lOS, it was held that, 
where certain goods were mortgaged, and the 
mortgagor afterwards exchanged some of the 
goods mortgaged for other goods, the mort- 
gagee thereby acquired a title to the goods 
taken In excliange. And the ca.se of Macomber 
V. Parker was cited by the learneil judge who 
delivered the opinion of the court as a strong 
case in supixirt of this decision, without notic- 
ing the distinction between the two cases. 
We cannot, however, concur In the principles 
upon which the case of Abbott v. G(X)dwin 
w!is decided. It was laid down In that case 
that "all persons coining In under the mort- 
gagor stand by snlisiiiulidii In his place, c<iual- 
ly affected by the contiact, whether notified of 
Its existence or not." liut the defendant In 
that case had allaclied the property as the 
propeiiy of the mortgagor; and, though ho 
clnlnic<l under lilm, he might show that the 
mortgage and the exchange of i)ro]ierty were 
void as to the creditors of the mortgagor, 
though they might bo valhl against him by 
w;iy of estopiiol or otherwise. And that case 
S(vnis to be Impliedly, though not expressly, 
overruled by the case of (ioodenow v. l>unn, 21 
Me. 80. And we fully concur with Whitman, 
C. .^., In the principles laid down by him In 
deciding the latter case. In the former case 



CHATTEL MOKTGAGES. 



10.i 



the mortgage deed had no reference to any 
property afterwards to be acquired by the 
mortgagor, and the case seems to have been 
decided on the assumed fact that the property 
mortgaged was afterwards exchanged for the 
property in dispute, with the assent of the 
mortgagee; but it does not appear that the ex- 
oliange was made with his assent, or that 
there was any agreement to this between the 
mortgagor and the mortgagee. In the case of 
Tapfleld v. Hillman, 6 Man. & G. 2^5, the 
construction and legal effect of a similar mort- 
gage were considered, and it was decided that 
the mortgagee had no title to any property ac- 
quired by the mortgagor subsequently to the 
date of the mortgage. There was a clause in 
the mortgage, giving power to the mortgagee, 
upon nonpayment of the debt, to enter into 
the mortgaged premises, and "to take, possess, 
hold and enjoy all and eveiT the goods, chat- 
tels, effects and premises." And it was held 
that the mortgagee had no right to take any 
property but what was on the mortgaged prem- 
ises at the date of the mortgage. It was, how- 
ever, said by Tindal, C. J., that "it would have 
been very easy so to have framed the power 
of entry as to make it extend to all effects 
found upon the premises at the time that such 
power should be enforced, if such was the in- 
tention of the parties." From this the defend- 
ant's counsel infer that such a power would 
have been upheld by the court. And it would, 
undoubtedly, have been a good defence in that 
action, if the mortgage had contained such a 
ix)wer; for it was an action of trespass by 
the mortgagor against the mortgagee. 

But although the mortgagee, with such a 
power, would be justified in seizing the 
goods of the mortgagor, purchased by him 
subsequently to the date of the mortgage, 
it would not vest the property in the mort- 
gagee. And so it was decided in the case 
of Lunn v. Thornton, 1 Man., G. & S. 379, 
which afterwards came before the same 
court, and was decided in February, 1845. 
The plaintiff In that case had a bill of sale 
from the defendant of "all and singular his 
goods, household furniture, plate, linen, chi- 
na, stock and implements of trade, and oth- 
er effects whatsoever, then remaining and 
being or which should at any time there- 
after, remain and be in, upon or about his 
dwelling-house," etc. And it was held that 
future-acquired property would not pass by 
such a conveyance, unless the grantor should 
ratify the grant after he had acquired the 
property therein. The counsel for the de- 
fendant relied, among other authorities, on 
Bacon's Maxims, Reg. 14, "Licet dispositio 
de interesse futuro sit inutilis, tamen potest 
fieri declaratio prascedens, quae sortiatur ef- 
fectum, interveniente novo actu." A strong 
case in support of the rule is cited by Ba- 
con. "If I mortgage land, and after cove- 
nant with I. S., in consideration of money 
which I receive of him, that after I have 
entered for the condition broken, I will 

GBIF. PERS. PROP. — 13 



stand seized to the use of the same 1. S., 
and I enter, and this deed is enrolled, and 
all within the six months, yet nothing pass- 
eth; because the enrolment is no new act, 
but a perfective ceremony of the first deed 
of bargain and sale; and the law Is more 
strong in that case, because of the vehe- 
ment relation which the enrolment hath to 
the time of the bargain and sale, at what 
time he had nothing but a naked condition." 
4 Bac. Works (Ed. 1803) 55. 

It was contended on the part of the plain- 
tiff, in Lunn v. Thornton that the bringing 
of the goods on the plaintiff's premises, 
where they were seized after the execution 
of the bill of sale, was the new act done by 
the plaintiff, which gave the declaration 
contained in the previous bill of sale its ef- 
fect. But the court held clearly that it 
could have no such effect. "The new act," 
Lord Tindal said, "which Bacon relies upon, 
appears, in all the instances which he puts, 
to be an act done by the grantor, for the 
avowed object and with the view of carry- 
ing the former grant or disposition into 
effect." This adjudication, which appears 
to us to be founded on well-established 
principles, is decisive against the defend- 
ant's claim as to the property purchased 
by the mortgagor after the mortgage. He 
did not prove, nor offer to prove, any act 
done by the mortgagor, after the mort- 
gage deed was executed, by which he rati- 
fied the same as to the subsequently ac- 
quired property. All he offered to prove 
was that he had taken possession of the 
goods before the attachment. But this evi- 
dently was irrelevant, as it was held to be 
by the ai-bitrator. But if he had proved 
that the mortgagor had delivered possession 
to him of the goods in question, to hold the 
same under the mortgage, that it would not 
have availed him against the plaintiff, al- 
though it might be good against the mort- 
gagor. By Rev. St. c. 74, § 5, it is provided 
that "no mortgage of personal property 
shall be valid against any other person than 
the parties thereto, unless possession of the 
mortgaged property be delivered to and re- 
tained by the mortgagee, or unless the mort- 
gage be recorded by the clerk of the town 
where the mortgagor resides." Now, it is 
clear, we think, that the record of the mort- 
gage deed is no sufficient notice of a legal 
incumbrance as to subsequently acquired 
property, because by law no such property 
could be sold or conveyed thereby; and it 
would furnish no notice that any property 
would be afterwards purchased, or, if pur- 
chased, that any act would be done to rati- 
fy the grant in that respect. As to such 
property, therefore, the mortgage could not 
be valid except as between the parties 
thereto, unless such goods were delivered 
by the mortgagor to the mortgagee, with the 
intention to ratify the mortgage, and the 
mortgagee retained open possession of the 



J 94 



CHATTEL MORTGAGES. 



same until the time of the attachment. 
Whether such proof would be sufficient 
against creditors, it is not necessary to de- 
cide, as, according to the report of the arbi- 
trator, no such question has been raised. 

As to the other questions raised, we think 
the decisions of the arbitrator were correct, 
and that upon the whole matter the plain- 



tiEE is entitled to recover the estimated val- 
ue of the goods in question, which were not 
the property of the mortgagor when the 
mortgage was executed, and no more. The 
case, therefore, is to be recommitted to' the 
arbitrator, to ascertain what goods were 
mortgaged, unless the parties should agree 
as to this matter. 



CHATTEL MORTGAGES. 



195 



WILLIAMS v. BRIGGS et al. 

(11 R. 1. 47G.) 

Supreme Court of Rhode Island. March 3, 
1877. 

Trover, heard by the court, jury trial being 
waived. 

Tillinghast & Ely, for plaiutiff. Benjamin 
N. Lapham and Daniel R. Ballou, for de- 
fendants. 

DURPEE, C. J. Tills is an action for tro- 
ver for the conversion of certain articles of 
personal property, vphich the plaiutlfl: claims 
to own as administrator on the estate of the 
late William B. Lawton. The title of Wil- 
liam B. Lawton accrued to him under two 
mortgages, executed to him by the defend- 
ant Nicholas C. Briggs, and dated, respective- 
ly, January 1, 1807, and July 2, 1870. The 
second mortgage purports to convey to Law- 
ton "all and singular tlie tools, fixtures, stock 
in trade for the manufacture of carriages, 
and also all carriages made or in process of 
manufacture, now in my carriage factory. 
No. 254 High street, in said city [Providence], 
together with all my right, title, and interest 
in and to tlie land and building used for and 
in connection with said factory. And also 
all and every article and thing that may be 
hereafter purchased by me to replace or re- 
new the articles and things hereinbefore con- 
veyed, and also all stock, fixtures, and car- 
riages, vi'hether manufactured or in process 
of manufacture, that may be hereafter pur- 
chased by me to be used in or about my busi- 
ness of buying and selling, making and re- 
pairing carriages." On the 14th of August, 
1S75, the defendant Nicholas C. Briggs made 
to the defendant Edwin Winsor a general as- 
signment of all the property of which he was 
the lawful owner, excepting only what and 
so much as was exempt from attachment by 
law, in trust for the equal benefit of all his 
creditors. Under this assignment the said 
Edwin Winsor took possession of the assign- 
ed property, among which was the property 
for the conversion of which this action is 
brought. It appeared at the trial, which 
was had before the court, jury trial being 
waived, that only a small part of the prop- 
erty which is in controversy was in the pos- 
session or ownership of the said Nicholas C. 
Briggs at the time the second mortgage was 
made, the larger part of it having been sub- 
sequeutly acquired for the purpose of renew- 
ing or replacing the stock and property 
which the said Nicholas C. Briggs then hatl. 
The case, therefore, raises the question 
whether a mortgage of property to be subse- 
(tuently acquired conveys to the mortgagee 
a title to such property when acquired, which 
Is valid at law as against the mortgagor or 
his voluntary assignee. The question is one 
which, so far as we know, has never been de- 
cided in this state by the supreme court sit- 
ting in banc. 



We think such a mortgage Is ineffectual to 
transfer the legal title of the property subse- 
quently acquired, unless when acquired pos- 
session thereof is given to the mortgagee, or 
taken by him under the mortgage. This view 
is supported by numerous oases in Massachu- 
setts: Jones V. Richardson, 10 Mete. (Mass.) 
481; Moody v. Wright, 13 Mete. (Mass.) 17; 
Barnard v. Eaton, 2 Cush. 294; Codman v. 
Freeman, 3 Cush. 300; Chesley v. Josselyn, 
7 Gray, 489; Ilenshaw v. Rank of Bellows 
Falls, 10 Gray, 508. By cases in other states: 
Otis V. .Sill, S Barb. 102; Milliman v. Neher, 
20 Barb. 37; Hunt v. Bullock, 23 111. 320; 
Hamilton v. Rogers, S Md. 301; Chynoweth 
v. Tenney, 10 Wis. 397; Farmers' Loan & 
Trust Co. V. Commercial Bank, 11 Wis. 207; 
Single V. Phelps, 20 Wis. 398. And by cases 
in England: Gale v. Burnell, 7 Q. B. 850; 
Lunn V. Thornton, 1 C. B. 379; Robinson v. 
McDonald, 5 Maule & S. 228; Congreve v. 
Bvetts, 10 Exch. 298; also in 20 Eng. Law 
& Eq. 493. The reason on which the cases 
rest is expressed in the maxim, "Nemo dat 
qtiod non habet." No person can grant or 
charge what he has not. The maxim in its 
strict sense is confined to cases at law. There 
are cases in equity which hold that such a 
mortgage is effectual to charge the property 
when acquired with an equitable lien, or to 
create an equitable title In It in favor of the 
mortgagee against the mortgagor, and even, 
as some of the cases maintain, against at- 
taching creditors, especially where they have 
actual notice of the mortgage. Holroyd v. 
Marshall, 10 H. L. Gas. 191; Mitchell v. Win- 
slow, 2 StoiT, 030, Fed. Cas. No. 9,073; Pen- 
nock V. Coe, 23 How. 117; Galveston R. Co. 
V. Cowdrey. 11 Wall. 459; U. S. v. New 
Orleans R. Co., 12 Wall. 302; Butt v. Ellett, 
19 Wall. .544; Smithurst v. Edmunds. 14 .\, 
J. Eq. 408; Tedford v. Wilson, 3 Head, 311; 
Sillers v. Lester, 4S Miss. 513; Seymour v. 
Canandaigua & N. F. R. Co., 25 Barb. 284. 
The ground of these decisions is that the 
mortgage, though inoperative as a convey- 
ance, is operative as an executoi-y contract 
which attaches to the propeity when acquir- 
ed, and in equity transfers the beneficial in- 
terest to the mortgagee, the mortgagor be- 
ing held as trustee for him in accordance 
with the familiar maxim that equity consid- 
ers that done which ought to be done. But 
in the case at bar the plaintiff Is not suing 
in equity, but at law in an action of trover 
for the tortious conversion of the property; 
and is suing, not a mere wrongdoer, but the 
persons having the legal ownership of the 
property, and certainly, therefore, caimot pre- 
vail without proof of something more than a 
merely equitable title or interest. He ought 
to prove that he has the legal title or owner- 
ship, either general or special, and the right 
of present possession. Fulton v. Fulton, 48 
Barb. 581; Herring v. Tilghman, 13 Ired. 
392; Klllian v. Carrol, 13 Ired. 431; Lons- 
dale V. Falrbrother, 10 R. I. 327. 



196 



CHATTEL MORTGAGES. 



It is true, language was used in some of 
tlie cases above cited, decided in tlie supreme 
court of the United States, wbicli seems to 
go beyond what we have stated to be the ef- 
fect of the cases; but the cases referred to 
were cases in equity, and we presume, there- 
fore, the language was designed to express 
the rule in equity, and not at law, except in 
so far as the rule at law had been modified 
by statute; or, the cases, being railway cases, 
in so far as the rule may be regarded as 
modiUed by considering the rolling stock and 
equipment of a railroad as fixtures. And see 
Farmers' Loan & Trust Co. v. Hendrickson, 
25 Barb. 4S4; Pierce v. Emery, 32 N. H. 4SL 

The plaintiff's counsel claims that there 
are cases at law upon the authority of which 
he is entitled to recover. He cites Chapman 
V. Woimer, 4 Ohio St. 481; Carr v. Allatt, 3 
Uurl. & N. 904; ChideU v. Galsworthy, G C. 

B. (N. S.) 470. In these cases possession of 
the after-acquired property had been given 
to the mortgagee, or lawfully taken by him 
under the mortgage and it was for this rea- 
son that the mortgagee was held to have ac- 
quired the legal title, and not because it was 
supposed the mortgage itself was effectual 
to transfer it. There are numerous cases 
which liold that, though the mortgage per se 
is inoperative to transfer the legal title, pos- 
session so given or taken under it transfers 
the legal title to the mortgagee, being the 
"novus actus interveniens" required by Lord 
Bacon's maxim to give effect to the mort- 
gage as a declaratio praecedens. The max- 
im is, "Licet dispositio de intoresse futuro sit 
iuutilis, tameu lieri potest declaratio praece- 
dens quoe sortiatur effectum, inlerveuiente 
novo actu." Broom, Leg. Max. 498; Hope v. 
Hayley, 5 El. & Bl. S30. Also in 34 Eng. 
Law & Eq. 189; Langton v. Horton, 1 Hare, 
.">49; Congreve v. Evetts, 10 Exch. 2'JS. Also 
in 2i; Eng. Law & Eq. 493; Baker v. Gray, 17 

C. B. 402; Carriugton v. Smith, 8 Pick. 419; 
Uowley V. Rice, 11 Melc. (Mass.) 333; Rowan 
v. Sharp's Ultlo Manuf'g Co., 29 Conn. 2S2; 
Titus v. Mabee, 25 111. 257; Chapin v. Cram, 
40 .Me. 001; Bryan v. Smith, 22 Ala. .531; 
Farmers' Loan & Trust Co. v. Commercial 
Bank, 11 Wis. 207. In the case at bar the 
plainlift has never acquired the legal title In 
this way, for he has never been in possession 
of the property. 

The plaintiff also claims to be entitled to 
recover upim the authority of Abbott v. 
Goodwin, 20 Me. 409. The mortgage In that 
case was not a mortgage of jiropcrty to be 
HUbsequcutly acquired. It was a niorlgage 
given to secure tlie payment of certain notes 
upon a stock of goods tiien in the possession 
of the mortgagor, and contained a stipulallon 
tliat the mortgagor shoulil retain iiohschnIou 
of the goods, "and pay over and account for 
the proceeds of all salcH of said goods to 
I hem [the niortBng<M>8j, to be applied In pay- 
ment of said notcR, or directly to apply said 
proceeds to the payment of said uoluu, at the 



discretion" of the mortgagees. The action 
was trespass for taking four hundred casks 
of lime, obtained by the mortgagor in ex- 
change for goods or the proceeds of goods 
mortgaged to the plaintiffs. The court sus- 
tained the action, holding that the lime must 
be considered as substituted for and repre- 
senting the goods which were mortgaged, 
having been exchanged for them or their 
proceeds, by the mortgagor acting as the 
agent of the mortgagees. 

In the case at bar there was no stipulation 
reserving to the mortgagee control of the 
proceeds of the property sold by the mort- 
gagor, and, moreover, there is no evidence 
that the new property was paid for out of 
the proceeds of the old, or, in fact, that it 
was paid for at all, though there is evidence 
that it was acquired to renew or replace the 
old. We think, therefore, the case of Ab- 
bott V. Goodwin, 20 Me. 408, is not an au- 
thority which can control the case at bar. 
And see Rhines v. Phelps, 8 III. 455; Holly 
V. Brown. 14 Conn. 255, 205; Levy v. Welsh, 
2 Edw. Ch. 438; Chapin v. Cram, 40 Me. 561. 

In Hamilton v. Rogers, 8 Md. 301, it was 
held that a mortgage of goods in a store, 
"together with all renewals and substitutions 
for the same or any part or parts thereof," 
did not convey subsequently acquired goods 
so as to give the mortgagee an action at law 
against a party seizing them. And Rose v. 
Bevan, 10 Md. 400, maintains that the rule is 
the same, even though the new goods are 
paid for out of the proceeds of the old. And 
in JIassachusetts such mortgages have been 
repeatedly condemned as inelfectual to con- 
fer any title to the goods subsequently ac- 
quired, though acquired in the usual course 
of business, and by way of substitution for 
goods which were mortgaged. Jones v. Rich- 
ardson, 10 Mole. (Mass.) 481; Moody v. 
AVrlght, 13 Mete. (Mass.) 17; Barnard v. Ea- 
ton, 2 Cush. 294. And see Codman v. Free- 
man, 3 Cush. 300. In the case at bar the 
only fact proved Is that the new goods were 
acquired In the usual course of business to 
replace the olil. We do not think this Is 
enough to give the mortgagee the same title 
In the new goods wliich he had In the old, 
or in fact to give him any legal title in them. 

The plaintiff contends tliat the defendants 
are estopped from denying his title. The 
facts set up by the defendants are not In 
contradiction of, but in conformity with, the 
mortgages. The mortgages contain uo ex- 
press covenants of title. The case, there- 
fore, discloses no ground for the appllcnfion 
of tho doctrine of estoppel. Chynoweth v. 
Tenney, 10 Wis. ;{97. We decide tiiat the 
plaiiitilT cannot recover In this action for 
goods acquired after the mortgage was given, 
The court .•ilso llnd tlu- defendants not guilty 
of converting the ri'inainder of the property. 
The evidence shows tliat the defendants re- 
fused to surrender all the properly to the 
plalnlilT. It docs not show to the eatisfac- 



CHATTEL MOKTGAGES. 



197 



tion of the court that they refused to surren- 
der so much of the property as was ou baud 
when the mortgage was given. 

POTTER, J. While I cannot concur in all 
the statements of law in the opinion of the 
majority of the court, I concur in the result. 
So long as we maintain the system of forms 
of actions which we have inherited from 
England, and by which justice is so often 
sacrificed to mere technicalities, we must 



hold that an action of trover cannot be sus- 
tained in a case like the present. Judgment 
for the defendant for his costs. 

After the foregoing opinion had been given, 
the plaintiff filed a bill in equity against 
Winsor and Briggs to establish his lien un- 
der the mortgage on the property acquired 
subsequent to its execution. The court 
granted the relief prayed for. See Williams 
V. Winsor, 12 R. I. 9. 



198 



CHATTEL MOKTGAGES. 



LANDERS et aJ. v. GEORGE et al. 

(49 Ind. 309.) 

Supreme Court of Indiana. Nov. Term, 1S74. 

Appeal from ciicuit court, Tiptou county. 

J. E. McDonald, J. M. Butier, W. R. Har- 
rison, and W. S. Shirley, for appellants. J. 
Hanna, F. Knefler, and C. L. Holsteiu, for 
appellees. 

DOWXEY, J. This record presents two 
cases between the parties; one commenced 
by the appellants against the appellees, and 
the other commenced by the appellees against 
the appellants. It presents also a question as 
to the operation and effect of a judgment in a 
third case between the parties, which was ter- 
minated before the comnieufement of the oth- 
er two. This last-named action, which we wUl 
for convenience designate as number one, 
was brought by Landers and others against 
George, sheriff of Tipton county, for the re- 
covery of the possession of personal property, 
consisting of a stock of dry goods, groceries, 
provisions, etc., of which it was alleged the 
plaintiffs were the owners and entitled to the 
possession, and which had been wrongfully 
taken, and were unlawfully detained by the 
defendant. The gofids were alleged to be of 
the value of eighteen himdred dollars. Judg- 
ment was asked for the recovery of possession 
of the property, and for ten dollars damages 
for the detention thereof. 

The defendant answered: (1) A general de- 
nial. (2) Property in Ilarlin and Boulden. (3) 
l*roi)orty in the defendant. (4) That certain 
judgments had been rendered against Harlin 
and Boulden, on which executions had been 
issued to the said George, as sheriff, which 
be had levied on the goods, which he alleged 
were at the time the goods of Ilarlin and 
lioulilen, in their possession, and subject to tlie 
executions; that the executions were still in 
his hands, and the goods subject to the lieu 
thereof. 

The second and third paragraphs of the an- 
swer were struck out on motion of the plain- 
tiffs, and tlii-ro was a reply to the fourth, a 
demurrer to which was filed by the dcl'ondaiits 
and sustained by the court. The record In the 
cause then proceeds as follows: 

•'.\nd the iilalntlffs falling to except f\nlhi-r, 
tills rause Is now submitted to the court lor 
tri.al as to the value of the property menllon- 
ed In the inniphilnt; and the court h.'ivliig 
heard and examined all tlie evMence, au<l be- 
ing HUlllchMilly advised In the preuilHcs docs 
Ilnd lli:il (he priijierly mentioned In the enin- 
plniiit Is of the valuer of two thousiind nine 
h\niilrc<l (IoIImi'h, and that the defendnnt Is en- 
titled to have the same reiuniod to him, and 
upon failure of the plalntHTs so to return the 
Hanie, Is entitled to recover the value thereof; 
and the court as.Hosses the dnmages of the <lo- 
fendnnt agaliiHt the plalntllTs, on acetiunt of 
the <letentlon of wild i)n)[ierty, nt the huiu of 
one dollar. It Is therefore cnnsldiMed by the 



court, that the defendant recover of the plain- 
tiffs the sum of one dollar, his damages as- 
sessed by the court, and all costs and charges, 
etc.; and, further, that he recover of the plain- 
tiffs the property mentioned in the complaint; 
and upon failure of the plaintiffs to return to 
the defendant said property, that he recover 
of the plaintiffs the value thereof, viz. the sum 
of two thousand nine hundred dollars." The 
residue of the entry relates to the prayer for, 
and the granting of, an appeal to this court. 
This appeal was perfected, and, in this court, 
the judgment below was aflirmed. See 40 Ind. 
160. 

Before the appeal was taken in that case, 
however, a suit on the replevin bond, which 
we may designate as number two, was insti- 
tuted by the appellees in this case, the sheriff 
and the plaintiffs in the executions which he 
held, against the appellants herein. The com- 
plaint sets out in detail the recovery of the 
several judgments against Ilarlin and Boul- 
den, the issuing of executions, their levy on 
the property, the institution of the action of 
replevin, the execution of the bond, the issue 
and judgment in the replevin suit, the fail- 
ure of the appellants herein to return the 
goods according to the judgment in the re- 
plevin suit; concluding with a prayer for 
judgment for the value of the goods, two 
thousand nine hundred dollars. 

M'hile the appeal in the replevin suit was 
pending in this court, the suit on the replevin 
bond, number two, was suspended. After the 
case number one was decided on appeal, the 
defendants in that action answered, In number 
two, on the replevin bonds: 

(1) A general denial. 

(■J) The second paragraph was held bad on 
dcmmrer, after a portion of it had been struck 
out; no (luostion is made as to this ruling. 

(3) In the third paragraph, as to part of the 
amount demanded, the defendants alleged, 
tlint before the issuing and levy of the execu- 
tions, on the ir«tli day of .Tanuary, 18(i9, Ilar- 
lin and Boulden were the owners of the stock 
of giiods. etc., and wore Indebted to the de- 
fenilants In certain amo\mts mentioned, and 
being Ro Indebted they, on the day and year 
aforesaid, cxeoited to the defendants a bill of 
sale of the stock of goods, etc., to secure the 
imyuicnt of said debts; that the same was 
duly acknowledged and recorded on the day 
of Its date In the olllce of the recorder of 
Tipton county, etc., being the county In which 
the said goiids, etc., were then sltujited, and in 
which the mortgagees resided; that said Ilar- 
lin and ll'iulden f.'illed to iiay said debts, and 
the condition of the bill of sale was broken be- 
fore the Issuing of the said executhins or ei- 
ther of them; and that the lien of .sale en- 
titled the defendniits. uiion said foifellure, to 
possession of so much of said stock of goods. 
Wlierefore, tlie defendants say, as to so nmch 
of the value of said goods, etc., as was neces- 
sary to satisfy said debts, the said jilalntllTs 
are not entitled to any judgment upon said 
undertaking, being the .'iiii' uiil aforesaid. 



CHATTEL MORTGAGES. 



199 



(4) This paragraph does not present any 
question wliich at all affects the case, as it 
comes before us. 

(5) That it is true the plaintiffs brought 
their action of replevin and exi^cuted the un- 
dertaking, etc., as set fortli in the complaint, 
and that judgment was rendered against these 
defendants, the plaintiffs in said action. But 
these defendants say that the only matter, 
question, or issue submitted to the court up- 
on the trial and final hearing of said action 
of replevin, and the only matter, question, or 
issue in said action which was competent and 
lawful for said court to try, upon the submis- 
sion of said cause for trial, as shown by the 
record therein, was the matter, question, and 
issue as to the value of the property men- 
tioned in the complaint therein,, and that the 
title and ownership of the property and the 
right to the possession of said property were 
not, nor either of them, submitted to or tried 
or determined by said court in said cause. 
And they aver that at and before the time of 
the execution of said undertaking, and at the 
time of the said submission to trial of said 
matter, the said plaintiffs In that action were 
the owners, had the title, and were entitled 
to the ownership of said ijroperty and the 
proceeds thereof; that they were so the own- 
ers thereof and entitled to the possession 
thereof and to the proceeds thereof, by vir- 
tue of a mortgage made by Harlin and Boul- 
den to them, a copy of which is alleged to 
be filed, and of the delivery of said goods to 
them, in discharge of the debts secured by 
said mortgage, after the execution of said 
mortgage upon the maturing of said debts, 
they not having paid said debts or any part 
thereof, or in any other manner than by the 
delivery of said property. 

The paragraph then professes to make a 
copy of the mortgage, and a transcript of the 
judgment and proceedings in the action of 
replevin parts thereof. It is further alleged 
that the delivery of the said property to them 
by Harlin and Boulden, in pureuance of the 
mortgage, was before the time of the rendi- 
tion of the said judgments stated in plain- 
tiffs' complaint, or any of them, and long be- 
fore the issue or service of any of said execu- 
tions, and that said property was of no great- 
er value than the amount of the debts due 
from said Harlin and Boulden to said Lan- 
ders and others; that all the matters involved 
and embraced in jilaintiffs' complaint herein 
are involved and embraced in the complaint 
of the defendants against the plaintiffs in 
this action now pending in this com-t, and 
can and must be determined in said action, 
and they therefore ask that this cause be 
consolidated, tried, etc., in and with that ac- 
tion. Wherefore, etc. 

The plaintiffs demurred to the third and 
fifth paragraphs of the answer. The demur- 
rer to the third was overruled, and that to 
the fifth was sustained. Reply in denial of 
the third paragraph of the answer. 

Cause number three was commenced last 



In order of time, and was by the appellants 
against the appellees. In the complaint it is 
alleged that on the 15th day of January, 1809, 
at, etc., Harlin and Boulden were indebted 
to the plaintiffs, stating the amounts, and 
copies of the notes are alleged to be filed and 
made part of the complaint; that they were 
then the owners of the goods, etc., and mort- 
gaged the same to the plaintiffs, and a copy 
of the mortgage, it is alleged, is filed, which 
was duly recorded, etc., on the day of its 
date; that afterward, in January, 1SG9, Har- 
lin and Boulden delivered the goods to the 
plaintiffs, in pursuance of the mortgage, they 
having failed to pay said debts, etc., to en- 
able the plaintiffs to sell and dispose of the 
same, and out of the proceeds, to satisfy their 
debts; that at the time of such delivery, the 
said goods, etc., were of no greater value than 
the amount of said debts of Harlin and 
Boulden to the plaintiffs; that the plaintiffs, 
in the most careful and economical manner, 
sold the goods and received therefor about 
eighteen hundred dollars, and no more; that 
the expenses of such sale were about one 
hundred and forty dollars, leaving the net 
sum of about sixteen hundred and sixty dol- 
lars, and no more. The dates and amounts 
of the judgments of the defendants are then 
stated, and it is alleged that on the .5th day 
of February, 1S69, executions were issued on 
each of said judgments to the defendant 
George, then sheriff of said county, which 
were then levied on the said goods, etc.; 
that such proceedings were had that after- 
ward, in the replevin suit, naming the par- 
ties, on the 8th day of May, ISGO, these plain- 
tiffs were ordered and adjudged to deliver 
said merchandise to the said George, as sucl 
sheriff, but before that time these plaintiffs 
had, in pursuance of their said mortgage and the 
delivery and transfer to them of said goods, 
etc., by Harlin and Boulden, fully sold and 
disposed of said goods, etc., as before aver- 
red. They aver that they yet have in their 
posse.ssion the said sum of sixteen hundred 
and sixty dollars, the net sum realized from 
the sale of said goods, which they aver be- 
longs to them by virtue of said mortgage and 
transfer of merchandise to them. They al- 
lege that the lien of said executions upon said 
merchandise has been fully and wholly dis- 
charged, by reason of the fact that the pro- 
ceeds of the same were wholly applied to pay 
their said mortgage, which was a lien on said 
goods, etc., prior to the judgments and ex- 
ecutions of the defendants. Prayer, that the 
plaintiffs be adjudged the owners of the sum 
of money realized from the sale of said 
goods, etc.; that the defendants be adjudged 
to have no lien on the merchandise by virtue 
of their judgments and executions or the levy 
thereof; that defendants be enjoined from 
enforcing said judgments for the return of 
said merchandise, or from having any action 
or proceeding arising out of, or connected with 
said judgments, etc. The mortgage, a copy 
of wliich is filed, is in the usual form of 



2C0 



CHATTEL MORTGAGES. 



chattel mortgages, and in the condition or 
defeasance provides as follows: "Xow, if 
the said Harlin and Boulden shall punctually 
pay said sum of money when the same shall 
become due, then the above conveyance to be 
void, otherwise to be in full force. The said 
Harlin and Boulden are to retain possession 
of said i)roperty until said debts become due, 
and upon default of payment of said money, 
shall deliver said property to Landers, Gon- 
dii & Co. and Landers, Pee & Co., in propor- 
tion to the amount of their respective claims 
against said Harlin and Boulden." 

The defendants in this case, appellees here, 
answered: 

(1) A general denial. 

(2) Payment by Harlin and Boulden be- 
fore the suit was brought, in money and 
property other and different from the goods, 
etc., mentioned in the complaint. 

(3) This paragraph was adjudged insuffi- 
cient on demurrer, and need not be set out. 

(4) That long before the commencement of 
this action, the plaintiffs, in an action by 
them instituted in the Tipton circuit court 
against Henry George, etc., claimed by their 
complaint to be the owners and entitled to 
the possession of said personal property; 
that the cause was put at issue; that by the 
record and judgment in said cause it was 
adjudged and determined that said goods 
were of the value of twenty-nine hundred 
dollars; that the question as to the value of 
said goods was in issue, and the issue was 
submitted to the court to find upon the evi- 
dence; that it was competent for the court 
to find the value of the goods In said cause, 
and the court did find and adjudge that said 
goods were of the value aforesaid; and the 
court further found, in said <auso, that the 
defendant in said cause was entitled to the 
possession of the goods; that the i)laiiitiffs 
should deliver the same to the defendant; 
and that, on failure to deliver the same, tlie 
defendant recover of the said plaintilTs 
twenty-nine hundred dollars, the value of 
the same. A tran.script of said cause number 
one Is made part of this paragraph of tlio 
answer. It Is also alleged that the plaintiffs 
appealed from the said judgment to the su- 
preme court, where the judgment was af- 
firmed. Wherefore the i)la!iililTs are estui)- 
ped to assort that the said goods wore of any 
other value than said sum of twcnty-nlno 
hundred dollars, and are estopped to deny 
any of the facts adjudicated In said cause; 
and defendants say said goods wore of the 
value of twenty-nine hundred dollars; and 
they deny that tlio said pl.'ilntlfTs were the 
owners of said goods. 

(."il That Iniig before the commcnremont of 
this ai'llon, llip i)lalnllfrs rocelvod from Har- 
lin and liouldoM, tlio porsnns who executed 
to tlio plaintirfH said protended mortgage, a 
largo amount of property, notes, effects, and 
rhosoH In action of llio value of a thousand 
dollars, a more parlhMilar description of 
which cannot be given, which were rocolv(!d 



on account of the indebtedness of said Har- 
lin and Boulden to the p'-aiiitiffs. mentioned 
in the plaintiffs' complaint, as a credit there- 
on. Wherefore, etc. 

Demurrers to the second and fourth para- 
graphs of the answer were filed by the ijlaiu- 
tiffs and overruled by the court. 

The plaintiffs replied to the second and 
fifth paragraphs of the answer by a general 
denial; and to the fourth paragraph they re- 
plied, that, admitting the bringing of the 
action by them against said George, and 
that the property in that case was and is 
the same as that mentioned in the complaint 
in this case, they say that the only matter, 
question, or issue which it was competent 
for the said court to hear and decide under 
the submission thereof to the court, as shown 
by the record thereof, was as to the value of 
the said property, and that the title aud 
ownership and right to the possession there- 
of were not, nor was either of them, sub- 
mitted to or decided by the court; that at 
the time of the levy on said goods by said 
George, as alleged in the fourth paragraph, 
and at the time of the trial and determina- 
tion of said cause, and until the same was 
finally sold and converted into money, as al- 
leged in the complaint, said property and the 
proceeds thereof belonged to and was the 
property of the said i)laintif[s, and they, 
during all of said time, were entitled to the 
possession thereof, by reason of the mort- 
gage, sale, and delivery thereof to the plain- 
tiffs by said Harlin and Boulden, as shown 
in the plaintiffs' complaint herein; and they 
say that the rights, questions, and allega- 
tions averred, stated, and sot forth by them 
in their complaint herein were not submit- 
ted to, tried by, or heard and determined in, 
the action set forth in said fourth paragraph 
of defendants' answer or otherwise, but re- 
main entire and (indeterniined; and they de- 
ny such allegations In said fourth para- 
graph of def(Midants' answer not specially 
herein replied to and controverted. 

The said actions numbers two and three, 
being thus at issue, were, by agreement of 
the parties and the order of the court, con- 
solidated, and the cause proceeded in the 
style of Landers and others v. George and 
otheis, the style of action number three. A 
trial was had by the court, and the court 
found for the defendants, assessing their 
damages at fifteen Innidred and throe dol- 
lars !iud thirty-seven cents. The plaiulin's 
moved the com't for a now trial. whl<-h mo- 
tion was overruled, and final judgment was 
rendered In favor of the di'fendant (Jeorgc, 
and others, for the amount of the finding. 

The following are the errors assigned: 
(1) Sust.'ilidng tlio demurrer to aiipellants' 
fifth paragraph of answer to appdloes' com- 
plaint on the replevin bond. (2) Refusing 
to permit appellants to give evidonce of- 
fered at llie Irlal by wllm-sses Landers and 
Boulden, as shown In exoopllons. (:b Itef us- 
ing to grant a new trl.'ii on a]ipc'll:iii(s' nio- 



CHATTEL MORTGAGES. 



201 



tlon and reasons. (4) In overruling appel- 
lants' demurrer to the second and fourth 
paragrrphs of appelloes' answer, in the action 
by appellants against appellees. 

Counsel for appellants say: "The main 
point variously presented for consideration 
In this case may, we think, be stated as fol- 
lows: Were the appellants, by the trial, 
proceedings, and judgment in the action of 
replevin begun by them in February, 18C9, 
against the sheriff, Henry George, and de- 
termined in April or May, 1869, precluded 
from asserting in the subsequent actions, 
which, being consolidated and tried, are now 
before the court in this appeal, their title to 
the property in dispute and its proceeds, 
under their mortgage and the delivery to 
them by the mortgagees and owners of the 
property, in discharge of the debt, in accord- 
ance with the stipulations of the mortgage, 
before any right of appellees to the property 
intervened? In other words, were the ques- 
tions of appellants' rights, in relation to the 
mortgaged property, so fuUy and fairly sub- 
mitted, tried, and determined in the action 
of replevin, as that when they began this 
action they had no remedy to enforce their 
rights left to them?" Counsel for the ap- 
pellees say: "It is conceded by the appel- 
lants, in tieir brief, that the record now be- 
fore this court presents but one question, 
and that is, whether the judgment in the 
replevin suit proper concludes them as to the 
title, right of possession, and value of the 
goods in controversy." 

Under this agreement as to the question 
presented, we do not deem it necessary to ex- 
amine the case with reference to each error 
assigned. In the action of replevin, there 
were two good paragraphs of answer: (1) 
A general denial. (4) Property in the de- 
fendant by virtue of the levy of the execu- 
tions in his hands, it being alleged that the 
property was the goods of the execution de- 
fendants and subject to the executions. In 
this condition of the issues, the cause went 
to the court, and we think we must hold for 
a full trial of the issues, notwithstanding 
what the clerk says in the entry as to what 
was to be tried. The plaintiffs had not made 
default, ceased to prosecute the action, or 
withdrawn their appearance. They were 
yet in com-t when the cause was submitted 
for trial, so far as anything appears. The 
clerk says, they failed further "to except," 
the cause was submitted for trial, etc. The 
issues must necessarily have been tried be- 
fore the court could render the judgment 
which was rendered. The court found that 
the property was of the value of two thousand 
nine himdred dollars, that the defendant was 
entitled to have the property returned to 
him, and that the damage of the defendant, 
on account of the detention of the property, 
was one dollar. The fact that there were 
issues to be tried, and that the com-t did not 
limit its finding to the ascertainment of the 
value of the property merely, requires us to 



hold that there was a trial of the Issues gen- 
erally, and not a mere finding of the value of 
the property, the statement of the clerk that 
the trial was "as to the value of the prop- 
erty" to the contrary notwithstanding. 

We think that we must hold, also, that the 
findings of the court decide the questions 
that the plaintiffs were not the owners or 
entitled to the possession of the property, as 
they alleged in their complaint. Necessarily, 
the plaintiffs must have failed to sustain 
their title to the property and right to its 
possession, or the court could not have found, 
as it did, that the defendant was entitled to 
a return of the property and damages for 
its detention. The fact that Landers and 
others had a mortgage of the goods, and that 
the possession of the goods had been sur- 
rendered to them, as they claim, if ti'ue, did 
not prevent the sheriff from levying on them 
and selling the equity of redemption in them. 
Until the mortgagee had himself, by legal 
notice and sale of the goods or by a judicial 
foreclosure and sale of them, cut off the equi- 
ty of redemption, they were hable to seizure 
and sale by the creditors of the mortgagor. 2 
Gavin & H. 240, § 436; Coe v. McBrown, 
22 Ind. 252; State v. Sandlin, 44 Ind. 504. 
There is nothing in the mortgage in this case 
which vests the absolute ownership of the 
goods in the mortgagees on failure to pay 
the debt It is provided in the mortgage 
that, upon default of payment of said money, 
Harlin and Boulden shaU deliver the proper- 
ty to Landers and others. But we do not 
think that such deliveiy merely, if made, 
would free the property from the equity of 
redemption. 

It was alleged, in the fourth paragraph of 
the answer of the sheriff in the replevin suit, 
that the property, when levied upon, was iu 
the possession of the mortgagors, and it may 
be inferred that the court found this to be 
true, if the finding of that fact was necessary 
to justify the judgment for a return of the 
property to the sheriff. The court decided 
the issues in favor of the defendant the sher- 
iff, found the value of the property, and that 
the defendant was entitled to a return of it. 
It also rendered judgment for the return, 
and in default of retm-n, for the value of the 
property. This gave the defendant in that 
action as the representative of the execution 
plaintiffs, or in connection with them, a right 
of action on the bond for the amoimt of the 
damage to them, not exceeding the value of 
the property which the plaintiffs had so 
failed to return. 

But appellants submit that they may al- 
lege and prove that their rights were in fact 
not considered and adjudicated in the case, 
and they refer, in support of their position, 
to the following cases: Cutler v. Cox, 2 
Blackf. 178; Byrket v. State. 3 Ind. 248; 
State V. Brutch, 12 Ind. 381: Brandon v. Ju- 
dah, 7 Ind. 545; Hargus v. Goodman, 12 Ind. 
629, and other similar cases. We have ex- 
amined these authorities and think they do 



■202 



CHATTEL MORTGAGES. 



not apply to the question which is here in- 
volved. They are cases where the fact may 
be alleged and proved without a contradic- 
tion of the record, as to what was found 
and adjudged by the court. Here, as we 
have already said, the record must be re- 
garded as showing a determination of the 
ownership and right to the possession of the 
property, and to allow an averment and 
proof, to the contrary would be to allow the 
record to be impeached and contradicted, 
and that, too, in a proceeding in which the 
record is used merely to establish a fact 
found, and where it is attacked collaterally. 
Counsel for appellants urge that there was 
no consent of their clients to the trial of 
any question in the ease without a jui^y, ex- 
cept as to the value of the property. We 
have already said that we regard the other 
facts in the record as overruling the state- 
ment of the clerk in his entry, that the trial 
was to ascertain the value of the property 
only. The plaintiffs were in court and made 
no objection to the mode of trial, to the find- 
ing of the court, or to the judgment ren- 
dered. When they brought the case to this 
court on appeal, they made no such objec- 
tion, and the judgment was in all things af- 
firmed. If the clerk's entry should be re- 
garded as stating the fact, still, when the 
court went beyond what was submitted and 
made a finding of other matters, and ren- 



dered judgment thereon, the plaintiffs 
should have made the objection then in some 
proper way, and if the error was not cor- 
rected there, the point should have been 
urged on appeal to this court. The record 
of the finding and judgment cannot now, in 
a collateral proceeding, be varied, amended, 
or contradicted. If there was any error in 
the finding or judgment, it is only an error, 
and does not at all affect the judgment while 
it remains unreversed. In favor of the con- 
clusiveness of the finding and judgment, as 
evidenced by the record, we may cite I'ischli 
y.'Fischli, 1 Blaekf. 360. Day v. Vallette, 25 
Ind. 42, Crosby v. Jeroloman, 37 Ind. 264, and 
Carr v. Ellis, 37 Ind. 465. and cases cited. 

It is clear that the answers of the appel- 
lants, in the action on the replevin bond, ad- 
mitting as they do, that they did not pmse- 
cute the action of replevin with effect and 
without delay, and that, although they wore 
ordered to do so, they did not return the 
property to the sheriff, can be no bar to that 
action. Brown v. Parker, 5 Blaekf. 291; 
Sherry v. Foresman, 6 Blaekf. 56; Wallace 
V. Cl;u-k, 7 Blaekf. 29S; Davis v. Crow, Id. 
129; lluUon v. Denton, 2 Ind. 644; O'Neal v. 
Wade, 3 Ind. 410. The judgment is affirmed, 
with costs. 

BUSKIRK, C. J. I dissent from the fore- 
going opinion and judgment 



WUT rOUUBaiMU CO., I-BINTEIIH ANU aTKUEOTVPElU, ST. PADL, UIKM. 



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Stockton, Calif. i 




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